Pages 511±612 Vol. 61 1±8±96 No. 5 federal register January 8,1996 Monday announcement ontheinsidecoverofthisissue. For informationonbriefingsinWashington,DC,see Briefings onHowToUsetheFederalRegister 1 II Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996

SUBSCRIPTIONS AND COPIES

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2 III

Contents Federal Register Vol. 61, No. 5

Monday, January 8, 1996

Alcohol, Tobacco and Firearms Bureau Federal Energy Regulatory Commission RULES NOTICES Alcoholic beverages: Environmental statements; availability, etc.: Wine; labeling and advertising— South Carolina Electric & Gas Co. et al., 556 Grape variety names, 522–541 Union Electric Co., 556 Applications, hearings, determinations, etc.: Army Department PacifiCorp, 556 See Engineers Corps NOTICES Federal Highway Administration Meetings: PROPOSED RULES Armed Forces Epidemiological Board, 554 Motor carrier safety standards: Driver qualifications— Coast Guard Vision and diabetes; limited exemptions, 606–611 RULES Federal Procurement Policy Office Ports and waterways safety: Fort Pierce, FL; regulated navigation area, 544–545 NOTICES NOTICES Procurement regulatory activity report; availability, 564– Meetings: 565 Lower Mississippi River Waterway Safety Advisory Federal Reserve System Committee, 571 NOTICES Applications, hearings, determinations, etc.: Customs Service First Financial Bancorp et al., 556–557 NOTICES First Union Corp. et al., 557 Intellectual property rights information; trademark and copyright recordations; paperless notification, 573 Financial Management Service See Fiscal Service Defense Department See Army Department Fiscal Service See Engineers Corps PROPOSED RULES RULES Financial management services: Personnel: Payments under Judgments and Private Relief Acts; Conduct on Pentagon Reservation, 541–544 claims procedures, 552–553 NOTICES Meetings: Food and Drug Administration Military Personnel Testing Advisory Committee, 554 RULES Animal drugs, feeds, and related products: Energy Department Sponsor name and address changes— See Federal Energy Regulatory Commission A.L. Pharma, Inc., 514–515 NOTICES Engineers Corps Grant and cooperative agreement awards: NOTICES Interstate Shellfish Sanitation Conference, 557–559 Environmental statements; availability, etc.: General Services Administration Sacramento County and City, CA; flood protection, 554– NOTICES 555 Environmental statements; availability, etc.: Sauquoit Creek, NY; flood control project, 555 Las Vegas, NV; Federal Building - U.S. Courthouse, 557

Farm Credit Administration Health and Human Services Department NOTICES See Food and Drug Administration Meetings; Sunshine Act, 574 Housing and Urban Development Department Federal Aviation Administration NOTICES RULES Grants and cooperative agreements; availability, etc.: Airworthiness directives: Community renaissance fellows program, 559–560 SAAB, 511–513 Historically black colleges and universities program, 560 Class E airspace, 513–514 PROPOSED RULES Internal Revenue Service Class E airspace, 548–552 RULES NOTICES Federal regulatory review; CFR parts removed, 515–517 Meetings: Income taxes: Aviation Rulemaking Advisory Committee, 571–572 Hedging transactions— Aviation Security Advisory Committee, 572 Consolidated group participation, 517–522 IV Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Contents

PROPOSED RULES NOTICES Income taxes: Aviation proceedings: Retirement bonds; withdrawn, 552 Agreements filed; weekly receipts, 570–571 Certificates of public convenience and necessity and Management and Budget Office foreign air carrier permits; weekly applications, 571 See Federal Procurement Policy Office Treasury Department National Archives and Records Administration See Alcohol, Tobacco and Firearms Bureau NOTICES See Customs Service Meetings: See Fiscal Service Archival still photographs, aerial film, maps, and See Internal Revenue Service drawings; reproduction orders— See Thrift Supervision Office Vendors, 560–561 NOTICES Meetings: Nuclear Regulatory Commission Debt Management Advisory Committee, 572–573 NOTICES Agency information collection activities: United States Enrichment Corporation Submission for OMB review; comment request, 561 NOTICES Reports; availability, etc.: Meetings; Sunshine Act, 574 Reassessment of NRC’s dollar per person-rem conversion factor policy, 561–562 Applications, hearings, determinations, etc.: Separate Parts In This Issue Five Star Products, Inc., et al., 562 Idaho State University, 563 Umetco Minerals Corp., 563–564 Part II Virginia Electric & Power Co., 564 Securities and Exchange Commission, 578–603

Personnel Management Office Part III PROPOSED RULES Department of Transportation, Federal Highway Employment: Administration, 606–611 Federal employment information; agency funding, 546– 548 NOTICES Reader Aids Excepted service: Additional information, including a list of public laws, Schedules A, B, and C; positions placed or revoked— telephone numbers, and finding aids, appears in the Reader Update, 565–566 Aids section at the end of this issue. Public Health Service See Food and Drug Administration New Feature in the Reader Aids! Securities and Exchange Commission Beginning with the issue of December 4, 1995, a new listing PROPOSED RULES will appear each day in the Reader Aids section of the Securities: Federal Register called ‘‘Reminders’’. The Reminders will Disclosure of accounting policies for derivative financial have two sections: ‘‘Rules Going Into Effect Today’’ and instruments, etc., 578–603 ‘‘Comments Due Next Week’’. Rules Going Into Effect NOTICES Today will remind readers about Rules documents Self-regulatory organizations; proposed rule changes: published in the past which go into effect ‘‘today’’. American Stock Exchange, Inc.; correction, 575 Comments Due Next Week will remind readers about Chicago Board Options Exchange, Inc., 566–568 impending closing dates for comments on Proposed Rules Cincinnati Stock Exchange, Inc.; correction, 575 documents published in past issues. Only those documents Philadelphia Stock Exchange, Inc., 568–569 published in the Rules and Proposed Rules sections of the Philadelphia Stock Exchange, Inc.; correction, 575 Federal Register will be eligible for inclusion in the Applications, hearings, determinations, etc.: Reminders. ENSCO International Inc., 569 The Reminders feature is intended as a reader aid only. International Tourist Entertainment Corp., 569–570 Neither inclusion nor exclusion in the listing has any legal Worldwide Short-Term Trust, 570 significance. The Office of the Federal Register has been compiling data Thrift Supervision Office for the Reminders since the issue of November 1, 1995. No RULES documents published prior to November 1, 1995 will be Savings associations: listed in Reminders. Loans to one borrower and technical amendments; correction, 575 Electronic Bulletin Board Transportation Department Free Electronic Bulletin Board service for Public Law See Coast Guard numbers, Federal Register finding aids, and a list of See Federal Aviation Administration documents on public inspection is available on 202–275– See Federal Highway Administration 1538 or 275–0920. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Contents V

CFR PARTS AFFECTED IN THIS ISSUE

A cumulative list of the parts affected this month can be found in the Reader Aids section at the end of this issue.

5 CFR Proposed Rules: 330...... 546 333...... 546 335...... 546 12 CFR 506...... 575 510...... 575 512...... 575 516...... 575 543...... 575 544...... 575 545...... 575 550...... 575 552...... 575 556...... 575 563...... 575 563b...... 575 563c ...... 575 563d...... 575 565...... 575 566...... 575 567...... 575 571...... 575 574...... 575 575...... 575 583...... 575 584...... 575 14 CFR 39...... 511 71 (2 documents) ...... 513, 514 Proposed Rules: 71 (4 documents) ...... 548, 549, 550, 551 17 CFR Proposed Rules: 210...... 578 228...... 578 229...... 578 239...... 578 240...... 578 249...... 578 21 CFR 510...... 514 558...... 514 26 CFR 1 (2 documents) ...... 515, 517 20...... 515 23...... 515 24...... 515 25...... 515 27...... 515 33...... 515 38...... 515 301...... 515 602 (2 documents) ...... 515, 517 Proposed Rules: 1...... 552 27 CFR 4...... 522 31 CFR Proposed Rules: 256...... 552 32 CFR 40b...... 541 234...... 541 33 CFR 165...... 544 49 CFR Proposed Rules: 391...... 606 511

Rules and Regulations Federal Register Vol. 61, No. 5

Monday, January 8, 1996

This section of the FEDERAL REGISTER Comments for inclusion in the Rules on this airplane type, recent occurrences contains regulatory documents having general Docket must be received on or before of multiple power interruptions applicability and legal effect, most of which March 8, 1996. demonstrate a need to increase the are keyed to and codified in the Code of ADDRESSES: Submit comments in safety margin for flight in icing Federal Regulations, which is published under conditions. Activation of the engine 50 titles pursuant to 44 U.S.C. 1510. triplicate to the Federal Aviation Administration (FAA), Transport anti-icing system at higher ambient The Code of Federal Regulations is sold by Airplane Directorate, ANM–103, temperatures will reduce the ice/slush the Superintendent of Documents. Prices of Attention: Rules Docket No. 95–NM– build-up within the engine inlet and new books are listed in the first FEDERAL 260–AD, 1601 Lind Avenue, SW., will improve the engine surge margin. REGISTER issue of each week. Renton, Washington 98055–4056. In light of the information discussed The information concerning this previously, the FAA finds that certain amendment may be obtained from or limitations and procedures should be DEPARTMENT OF TRANSPORTATION examined at the FAA, Transport included in the FAA-approved Airplane Airplane Directorate, 1601 Lind Flight Manual (AFM) to: Federal Aviation Administration Avenue, SW., Renton, Washington. —provide the flight crew with 14 CFR Part 39 FOR FURTHER INFORMATION CONTACT: procedures to verify that the auto- Ruth E. Harder, Aerospace Engineer, ignition system is operational; [Docket No. 95±NM±260±AD; Amendment Standardization Branch, ANM–113, —expand the current definition of icing 39±9480; AD 96±01±04] FAA, Transport Airplane Directorate, conditions by increasing the 1601 Lind Avenue, SW., Renton, temperature at which those Airworthiness Directives; Saab Model Washington 98055–4056; telephone conditions exist from +5 degrees SAAB SF340A and SAAB 340B Series (206) 227–1721; fax (206) 227–1149. Celsius to +10 degrees Celsius; and Airplanes SUPPLEMENTARY INFORMATION: The FAA —alert the flight crew to certain icing has received a report indicating that an conditions during which power to an AGENCY: Federal Aviation unsafe condition may exist on certain Administration, DOT. engine may be interrupted, and Saab Model SAAB SF340A and SAAB provide the flight crew with guidance ACTION: Final rule; request for 340B series airplanes. Recently, an to aid in avoidance of such comments. incident occurred on a Model SAAB occurrences. 340B series airplane during which, SUMMARY: This amendment adopts a shortly after exiting icing conditions, The FAA has determined that such new airworthiness directive (AD) that is the left engine of the airplane shut down limitations and procedures currently are applicable to certain Saab Model SAAB abruptly and the right engine not defined adequately in the AFM for SF340A and SAAB 340B series experienced multiple power these airplanes. airplanes. This action requires revising interruptions. This airplane model is manufactured the Airplane Flight Manual (AFM) to Subsequent investigation revealed in Sweden and is type certificated for require verification that the auto- that shutdown of the left engine operation in the United States under the ignition system is operational; to define occurred due to ingestion of ice and/or provisions of section 21.29 of the icing conditions at higher ambient slush into the engine from the inlet. In Federal Aviation Regulations (14 CFR temperatures; and to provide the flight addition, the auto-ignition system had 21.29) and the applicable bilateral crew with limitations and procedures to failed on that engine; therefore, engine airworthiness agreement. Pursuant to aid in the avoidance of engine power re-light did not occur. Failure of the this bilateral airworthiness agreement, interruptions. This amendment is auto-ignition system, which is a the Luftfartsverket (LFV), which is the prompted by a report of complete power component of the engine Digital airworthiness authority for Sweden, has loss of the left engine and power Electronic Controller (DEC), was the kept the FAA informed of the situation fluctuations on the right engine as a result of a broken fuse. This fuse failure described above. The FAA has result of build up of ice and/or slush in also caused the engine turbine (or Np) examined the findings of the LFV, the engine inlet and subsequent overspeed protection system to be reviewed all available information, and ingestion into the engines; the auto- inoperative. determined that AD action is necessary ignition system of the left engine had The interruptions of power to the for products of this type design that are failed, which prevented automatic right engine also were caused by certificated for operation in the United restart of the engine following power ingestion of ice and/or slush into the States. interruption. The actions specified in engine; however, the auto-ignition Since an unsafe condition has been this AD are intended to prevent failure system for the right engine was identified that is likely to exist or of the auto-ignition system to re-light operational and engine re-light develop on other airplanes of the same the engine in the event of power occurred. In addition, failure of the type design registered in the United interruptions due to the ingestion of ice auto-ignition system can exist States, this AD is being issued to and/or slush into the engine, which concurrently such that engine re-light prevent failure of the auto-ignition could result in engine flameout and does not occur. These conditions, if not system to re-light the engine in the subsequent shutdown, and to provide corrected, could result in engine event of power interruptions due to the the flight crew with guidance to aid in flameout and subsequent shutdown. ingestion of ice and/or slush into the avoidance of such occurrences. Although single event power engine, which could result in engine DATES: Effective January 23, 1996. interruptions have occurred previously flameout and subsequent shutdown; and 512 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations to provide the flight crew with guidance interested persons. A report that § 39.13 [Amended] to aid in avoidance of such occurrences. summarizes each FAA-public contact 2. Section 39.13 is amended by This AD requires the following: concerned with the substance of this AD adding the following new airworthiness —revising the Limitations Section of the will be filed in the Rules Docket. directive: AFM to require verification that the Commenters wishing the FAA to 96–01–04 SAAB Aircraft AB: Amendment auto-ignition system is operational; acknowledge receipt of their comments 39–9480. Docket 95–NM–260–AD. —revising the Limitations Section of the submitted in response to this rule must Applicability: Model SAAB SF340A series AFM to define icing conditions at submit a self-addressed, stamped airplanes, serial numbers 004 through 159 inclusive; and Model SAAB 340B series higher ambient temperatures; postcard on which the following —revising the Normal Procedures airplanes, serial numbers 160 and statement is made: ‘‘Comments to subsequent; certificated in any category. Section of the AFM to alert the flight Docket Number 95–NM–260–AD.’’ The crew to certain icing conditions Note 1: This AD applies to each airplane postcard will be date stamped and identified in the preceding applicability during which power to an engine may returned to the commenter. provision, regardless of whether it has been be interrupted, and to provide the modified, altered, or repaired in the area flight crew with limitations and The regulations adopted herein will subject to the requirements of this AD. For procedures to aid in avoidance of not have substantial direct effects on the airplanes that have been modified, altered, or interruptions of power to an engine. States, on the relationship between the repaired so that the performance of the requirements of this AD is affected, the For Model SAAB 340B series national government and the States, or on the distribution of power and owner/operator must use the authority airplanes having an auto-ignition system provided in paragraph (c) of this AD to that is found to be inoperative, this AD responsibilities among the various request approval from the FAA. This requires a test of the Np overspeed levels of government. Therefore, in approval may address either no action, if the system to ensure that it is operative, and accordance with Executive Order 12612, current configuration eliminates the unsafe repair, if necessary. it is determined that this final rule does condition; or different actions necessary to This is considered to be interim not have sufficient federalism address the unsafe condition described in action until final action is identified, at implications to warrant the preparation this AD. Such a request should include an assessment of the effect of the changed which time the FAA may consider of a Federalism Assessment. configuration on the unsafe condition further rulemaking. The FAA has determined that this addressed by this AD. In no case does the Since a situation exists that requires regulation is an emergency regulation presence of any modification, alteration, or the immediate adoption of this that must be issued immediately to repair remove any airplane from the regulation, it is found that notice and applicability of this AD. correct an unsafe condition in aircraft, Compliance: Required as indicated, unless opportunity for prior public comment and that it is not a ‘‘significant hereon are impracticable, and that good accomplished previously. regulatory action’’ under Executive cause exists for making this amendment To prevent failure of the auto-ignition Order 12866. It has been determined system to re-light the engine in the event of effective in less than 30 days. further that this action involves an power interruptions due to the ingestion of Comments Invited emergency regulation under DOT ice and/or slush into the engine, which could Regulatory Policies and Procedures (44 result in engine flameout and subsequent Although this action is in the form of shutdown; and to provide the flight crew a final rule that involves requirements FR 11034, February 26, 1979). If it is with guidance to aid in avoidance of such affecting flight safety and, thus, was not determined that this emergency occurrences; accomplish the following: preceded by notice and an opportunity regulation otherwise would be (a) Within 10 days after the effective date for public comment, comments are significant under DOT Regulatory of this AD, revise the FAA-approved invited on this rule. Interested persons Policies and Procedures, a final Airplane Flight Manual (AFM) to include the regulatory evaluation will be prepared text contained in paragraphs (a)(1), (a)(2), are invited to comment on this rule by (a)(3), and (a)(4) of this AD, as applicable. submitting such written data, views, or and placed in the Rules Docket. A copy This may be accomplished by inserting a arguments as they may desire. of it, if filed, may be obtained from the copy of this AD into the AFM. Communications shall identify the Rules Docket at the location provided (1) For Model SAAB SF340A series Rules Docket number and be submitted under the caption ADDRESSES. airplanes: Insert the following sub-section in in triplicate to the address specified the Limitations Section of the AFM: List of Subjects in 14 CFR Part 39 under the caption ADDRESSES. All ‘‘IGNITION SYSTEM communications received on or before Air transportation, Aircraft, Aviation Prior to each flight, before engine start, the closing date for comments will be safety, Safety. perform a check of the auto-ignition system. considered, and this rule may be • Select batteries ON (external power ON amended in light of the comments Adoption of the Amendment or OFF). received. Factual information that • Check that IGN switches are in NORM supports the commenter’s ideas and Accordingly, pursuant to the position. authority delegated to me by the • Advance PLs above FLT IDLE and verify suggestions is extremely helpful in the IGN lights in the Flight Status Panel evaluating the effectiveness of the AD Administrator, the Federal Aviation Administration amends part 39 of the (FSP) illuminate. In bright sunlight, shade action and determining whether FSP to ensure IGN lights are visible when additional rulemaking action would be Federal Aviation Regulations (14 CFR illuminated. needed. part 39) as follows: • Retard PLs to GND IDLE. (IGN lights Comments are specifically invited on should go out.) the overall regulatory, economic, PART 39ÐAIRWORTHINESS • If an IGN light fails to illuminate when environmental, and energy aspects of DIRECTIVES PLs are above FLT IDLE, the auto-ignition the rule that might suggest a need to system is considered to be inoperative. 1. The authority citation for part 39 If the auto-ignition system is inoperative: modify the rule. All comments • continues to read as follows: BEFORE ENTERING ICING submitted will be available, both before CONDITIONS, SET IGNITION TO CONT. and after the closing date for comments, Authority: 49 USC 106(g), 40101, 40113, Maintain ignition in CONT until touchdown, in the Rules Docket for examination by 44701. even if icing conditions cease to exist.’’ Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 513

(2) For Model SAAB 340B series airplanes: Note 2: Information concerning the proceeding by submitting written Insert the following sub-section in the existence of approved alternative methods of comments on the proposal to the FAA. Limitations Section of the AFM: compliance with this AD, if any, may be No comments to the proposal were ‘‘IGNITION SYSTEM obtained from the Standardization Branch, received. Class E airspace designations ANM–113. After each engine shutdown, perform a are published in paragraph 6005 of FAA check of the auto-ignition system. (d) Special flight permits may be issued in Order 7400.9C dated August 17, 1995, accordance with sections 21.197 and 21.199 • Adjust Ng to approximately 75%–77%; and effective September 16, 1995, which minimum is 75%. of the Federal Aviation Regulations (14 CFR • 21.197 and 21.199) to operate the airplane to is incorporated be referenced in 14 CFR Shut down the engines (CL to FUEL 71.1. The E airspace designations listed OFF). a location where the requirements of this AD • Verify the IGN lights in the Flight Status can be accomplished. in this document will be published Panel (FSP) illuminate while Ng is above (e) This amendment becomes effective on subsequently in this Order. January 23, 1996. 62%. In bright sunlight, shade the FSP to The Rule ensure that lights are visible when Issued in Renton, Washington, on January illuminated. 2, 1996. This amendment to part 71 of the • If an IGN light fails to illuminate, the Darrell M. Pederson, Federal Aviation Regulations (14 CFR auto-ignition system is considered to be Acting Manager, Transport Airplane part 71) amends the Class E airspace inoperative. • Directorate, Aircraft Certification Service. area at Globe, AZ. The development of Retard PLs to GND IDLE. a GPS SIAP to RWY 27 has made this If the auto-ignition system is inoperative: [FR Doc. 96–188 Filed 1–5–96; 8:45 am] • BEFORE ENTERING ICING BILLING CODE 4910±13±U action necessary. The intended effect of CONDITIONS, SET IGNITION TO CONT. this action is to provide adequate Maintain ignition in CONT until touchdown, airspace for aircraft executing the GPS even if icing conditions cease to exist.’’ 14 CFR Part 71 RWY 27 SIAP at Globe-San Carlos (3) For all airplanes: Insert the following in Regional Air Facility Airport, Globe, [Airspace Docket No. 95±AWP±35] the Limitations Section of the AFM, under AZ. Icing Conditions: Amendment of Class E Airspace; The FAA has determined that this ‘‘Icing conditions exist when visible regulation only involves an established moisture in any form is present (such as Globe, AZ clouds, fog with visibility of one mile or less, body of technical regulations for which rain, snow, sleet, ice crystals) or standing AGENCY: Federal Aviation frequent and routine amendments are water, slush, or snow (hard packed snow Administration (FAA), DOT. necessary to keep them operationally excluded) is present on the ramps, taxiways, ACTION: Final rule. current. Therefore, this proposed or runways and the OAT or SAT is +10 regulation—(1) is not a ‘‘significant degrees C and below during ground and SUMMARY: This action amends the Class regulatory action’’ under Executive flight operation.’’ E airspace area at Globe, AZ. The Order 12866; (2) is not a ‘‘significant (4) For all airplanes: Insert the following in development of a Global Positioning rule’’ under DOT Regulatory Policies the Normal Procedures Section of the AFM, System (GPS) Standard Instrument under Operation in Icing Conditions: and Procedures (44 FR 10034; February Approach Procedure (SIAP) to Runway 26, 1979); and (3) does not warrant ‘‘CAUTION (RWY) 27 has made this action preparation of a Regulatory Evaluation Engine power interruptions may occur at necessary. The intended effect of this as the anticipated impact is so minimal. ISA to ISA +20 degrees Celsius temperature action is to provide adequate controlled Since this is a routine matter that will and in light (or undetected) icing conditions, airspace for Instrument Flight Rules or shortly after exiting these conditions. only affect air traffic procedures and air (IFR) operations at Globe-San Carlos navigation, it is certified that this rule Engine function will normally be recovered Regional Air Facility Airport, Globe, by the auto-ignition system before any will not have a significant economic serious loss of power. To aid in avoidance of AZ. impact on a substantial number of small these occurrences: EFFECTIVE DATE: 0901 UTC February 29, entities under the criteria of the • Engine anti-ice systems must be 1996. Regulatory Flexibility Act. activated prior to entering icing conditions, FOR FURTHER INFORMATION CONTACT: List of Subjects in 14 CFR Part 71 and maintained ON for at least 5 minutes Scott Speer, Airspace Specialist, System after exiting icing conditions.’’ Management Branch, AWP–530, Air Airspace, Incorporation by reference, (b) For Model SAAB 340B series airplanes: If an auto-ignition system is found to be Traffic Division, Western-Pacific Navigation (air). inoperative, prior to further flight, perform an Region, Federal Aviation Adoption of the Amendment Np overspeed test to ensure that the Np Administration, 15000 Aviation overspeed system is operative, in accordance Boulevard, Lawndale, California, 90261, In consideration of the foregoing, the with the procedures specified in General telephone (310) 725–6533. Federal Aviation Administration Electric Maintenance Manual SEI–576. If the amends 14 CFR part 71 as follows: Np overspeed system is found to be SUPPLEMENTARY INFORMATION: inoperative, prior to further flight, repair in History PART 71Ð[AMENDED] accordance with the procedures specified in General Electric Maintenance Manual SEI– On November 1, 1995, the FAA 1. The authority citation for 14 CFR 576. proposed to amend part 71 of the part 71 continues to read as follows: (c) An alternative method of compliance or Federal Aviation Regulations (14 CFR Authority: 49 U.S.C. 106(g), 40103, 40113, adjustment of the compliance time that part 71) by amending the Class E 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– provides an acceptable level of safety may be airspace area at Globe, AZ (60 FR 1963 Comp., p. 389; 14 CFR 11.69 used if approved by the Manager, 55502). This action would provide Standardization Branch, ANM–113, FAA, adequate controlled airspace to § 71.1 [Amended] Transport Airplane Directorate. Operators shall submit their requests through an accommodate a GPS SIAP to RWY 27 at 2. The incorporation by reference in appropriate FAA Principal Maintenance Globe-San Carlos Regional Air Facility 14 CFR 71.1 of the Federal Aviation Inspector, who may add comments and then Airport, Globe, AZ. Administration Order 7400.9C, Airspace send it to the Manager, Standardization Interested parties were invited to Designations and Reporting Points, Branch, ANM–113. participate in this rulemaking dated August 17, 1995, and effective 514 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations

September 16, 1995, is amended as Federal Aviation Regulations (14 CFR § 71.1 [Amended] follows: part 71) by amending the Class E 2. The incorporation by reference in airspace area at Page, AZ (60 FR 55813). 14 CFR 71.1 of the Federal Aviation Paragraph 6005 Class E airspace areas This action would provide adequate Administration Order 7400.9C, Airspace extending upward from 700 feet or more controlled airspace for Instrument Flight Designations and Reporting Points, above the surface of the earth. Rules (IFR) operations at Page dated August 17, 1995, and effective * * * * * Municipal Airport, Page, AZ. September 16, 1995, is amended as AWP NV E5 Globe, AZ [Revised] Interested parties were invited to follows: Globe-San Carlos Regional Air Facility participate in this rulemaking Paragraph 6005 Class E airspace areas Airport, AZ proceeding by submitting written extending upward from 700 feet or more (lat. 33°21′10′′ N, long. 110°39′51′′ comments on the proposal to the FAA. above the surface of the earth. That airspace extending upward from 700 No comments to the proposal were feet above the surface within an 5-mile radius received. Class E airspace designations * * * * * of the Globe-San Carlos Regional Air Facility are published in paragraph 6005 of FAA AWP AZ E5 Page AZ [Revised] Airport. That airspace extending upward Order 7400.9C dated August 17, 1995, Page Municipal Airport, AZ from 1,200 feet above the surface bounded by and effective September 16, 1995, which (Lat. 36°55′34′′ N, long. 111°26′54′′ W) a line beginning at lat. 33°26′00′′ N, long. ° ′ ′′ ° ′ ′′ is incorporated by reference in 14 CFR Page VOR/DME 110 36 00 W; to lat. 33 24 00 N, long. 71.1 The Class E airspace designations (Lat. 36°55′41′′ N, long. 111°27′02′′ W) 110°09′00′′ W; to lat. 33°09′00′′ N, long. 110°09′00′′ N; to lat. 33°12′00′′ N, long. listed in this document will be That airspace extending upward from 700 110°36′00′′ W, thence to the point of published subsequently in this Order. feet above the surface within a 6.5-mile beginning. radius of Page Municipal Airport, and within The Rule 3 miles either side of the Page VOR 340° * * * * * radial, extending from the 6.5-mile radius to Issued in Los Angeles, California, on This amendment to part 71 of the Federal Aviation Regulations (14 CFR the 10 miles northwest of the Page VOR/ December 14, 1995. DME. That airspace extending upward from Richard R. Lien, part 71) amends the Class E airspace 1,200 feet above the surface bounded by a Manager, Air Traffic Division, Western-Pacific area at Page, AZ. The intended effect of line beginning at lat. 36°56′49′′ N, long. Region. this action is to provide adequate 111°18′57′′ W; to lat. 36°35′00′′ N, long. ° ′ ′′ ° ′ ′′ [FR Doc. 96–219 Filed 1–5–96; 8:45 am] airspace for aircraft executing the GPS 111 09 30 W; to lat. 36 35 00 N, long 111°30′00′′ N; to lat. 36°41′00′′ N, long. BILLING CODE 4910±13±M RWY 15 SIAP at Page Municipal Airport, Page, AZ. 111°32′00′′ W; to lat. 36°44′43′′ N, long. 111°35′20′′ W; to lat. 37°09′11′′ N, long. The FAA has determined that this 111°46′30′′ W; to lat. 37°10′49′′ N, long. 14 CFR Part 71 regulation only involves an established 111°40′55′′ W; to lat. 37°22′00′′ N, long. body of technical regulations for which ° ′ ′′ ° ′ ′′ [Airspace Docket No. 95±AWP±36] 111 46 00 W; to lat. 37 26 00 N, long. frequent and routine amendments are 111°35′00′′ W; to lat. 37°19′30′′ N, long. ° ′ ′′ ° ′ ′′ Amendment of Class E Airspace; Page, necessary to keep them operationally 111 20 30 W; to lat. 37 10 22 N, long. 111°25′04′′ W; to lat. 36°58′37′′ N, long. AZ current. Therefore, this proposed regulation—(1) Is not a ‘‘significant 111°19′45′′ W, thence to the point of AGENCY: Federal Aviation regulatory action’’ under Executive beginning. Administration (FAA), DOT. Order 12866; (2) is not a ‘‘significant * * * * * Issued in Los Angeles, California, on ACTION: Final rule. rule’’ under DOT Regulatory Policies and Procedures (44 FR 10034; February December 14, 1995. SUMMARY: This action amends the Class 26, 1979); and (3) does not warrant Richard R. Lien, E airspace area at Page, AZ. The preparation of a Regulatory Evaluation Manager, Air Traffic Division, Western-Pacific development of a Global Positioning as the anticipated impact is so minimal. Region. System (GPS) Standard Instrument Since this is a routine matter that will FR Doc. 96–220 Filed 1–5–96; 8:45 am] Approach Procedure (SIAP) to Runway only affect air traffic procedures and air BILLING CODE 4910±13±M (RWY) 15 has made this action navigation, it is certified that this rule necessary. The intended effect of this will not have a significant economic action is to provide adequate controlled impact on a substantial number of small DEPARTMENT OF HEALTH AND airspace for Instrument Flight Rules entities under the criteria of the HUMAN SERVICES (IFR) operations at Page Municipal Regulatory Flexibility Act. Airport, Page, AZ. Food and Drug Administration List of Subjects in 14 CFR Part 71 EFFECTIVE DATE: 0901 UTC February 29, 21 CFR Parts 510 and 558 1996. Airspace, Incorporation by reference, FOR FURTHER INFORMATION CONTACT: Navigation (air). Animal Drugs, Feeds, and Related Scott Speer, Airspace Specialist, System Adoption of the Amendment Products; Change of Sponsor Management Branch, AWP–530, Air Traffic Division, Western-Pacific In consideration of the foregoing, the AGENCY: Food and Drug Administration, Region, Federal Aviation Federal Aviation Administration HHS. Administration, 15000 Aviation amends 14 CFR part 71 as follows: ACTION: Final rule. Boulevard, Lawndale, California, 90261, PART 71Ð[AMENDED] SUMMARY: The Food and Drug telephone (310) 725–6533. Administration (FDA) is amending the SUPPLEMENTARY INFORMATION: 1. The authority citation for 14 CFR animal drug regulations to reflect a part 71 continues to read as follows: change of sponsor for new animal drug History Authority: 49 U.S.C. 106(g), 40103, 40113, applications (NADA’s) from Whitmoyer On November 3, 1995, the FAA 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– Laboratories, Inc., to A. L. Pharma, Inc. proposed to amend part 71 of the 1963 Comp., p. 389; 14 CFR 11.69. EFFECTIVE DATE: January 8, 1996. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 515

FOR FURTHER INFORMATION CONTACT: § 558.55 [Amended] 26 CFR Parts 20, 23, and 24 Thomas J. McKay, Center for Veterinary 4. Section 558.55 Amprolium is Estate taxes, Reporting and Medicine (HFV–102), Food and Drug amended in the table in paragraph recordkeeping requirements. Administration, 7500 Standish Pl., (d)(2), under the entry (iv), appearing Rockville, MD 20855, 301–827–0213. under the heading ‘‘Limitations’’ at the 26 CFR Part 25 SUPPLEMENTARY INFORMATION: ‘‘Carbarsone 227 to 340.5’’ entry, by Gift taxes, Reporting and Whitmoyer Laboratories, Inc., 19 North removing ‘‘011794’’ and adding in its recordkeeping requirements. Railroad St., Myerstown, PA 17067, has place ‘‘046573’’. 26 CFR Part 27 informed FDA that it has transferred the § 558.95 [Amended] ownership of, and all rights and Estate taxes, Gift taxes, Reporting and interests in, approved NADA’s 10–285 5. Section 558.95 Bambermycins is recordkeeping requirements. (Carbarsone), 39–646 (Carbarsone + amended in paragraph (b)(3)(iv)(b) by 26 CFR Parts 33 and 38 Bacitracin Methylene Disalicylate) and removing ‘‘011794’’ and adding in its place ‘‘046573’’. Employment taxes, Reporting and 38–879 (Carbarsone + Zoalene) to A. L. recordkeeping requirements. Pharma, Inc., One Executive Dr., Fort § 558.120 [Amended] Lee, NJ 07024. Accordingly, the agency 26 CFR Part 301 is amending 21 CFR 510.600(c)(1) and 6. Section 558.120 Carbarsone (not U.S.P.) is amended in paragraphs (a)(1) Employment taxes, Estate taxes, (c)(2) to remove the sponsor name Excise taxes, Gift taxes, Income taxes, Whitmoyer Laboratories, Inc., because and (a)(2) by removing ‘‘011794’’ and adding in its place ‘‘046573’’. Penalties, Reporting and recordkeeping the firm no longer is the holder of any requirements. approved NADA’s. The agency is also Dated: December 22, 1995. amending 21 CFR 558.55, 558.95, and Robert C. Livingston, 26 CFR Part 602 558.120 to reflect the transfer of Director, Office of New Animal Drug Reporting and recordkeeping ownership. Evaluation, Center for Veterinary Medicine. requirements. List of Subjects [FR Doc. 96–230 Filed 1–5–96; 8:45 am] Amendments to the Regulations BILLING CODE 4160±01±F Accordingly, under the authority of 21 CFR Part 510 26 U.S.C. 7805, 26 CFR parts 1, 20, 23, Administrative practice and 24, 25, 27, 33, 38, 301, and 602 are procedure, Animal drugs, Labeling, amended as follows: DEPARTMENT OF THE TREASURY Reporting and recordkeeping PART 1ÐINCOME TAXES requirements. Internal Revenue Service Paragraph 1. Part 1 is amended as 21 CFR Part 558 26 CFR Parts 1, 20, 23, 24, 25, 27, 33, follows: Animal drugs, Animal feeds. 38, 301, and 602 1. The authority citation for part 1 is Therefore, under the Federal Food, amended by removing the entry for Drug, and Cosmetic Act and under [TD 8655] § 1.1303–1. authority delegated to the Commissioner Removal of Final and Temporary § 1.32±1 [Removed] of Food and Drugs and redelegated to Regulations 2. Section 1.32–1 is removed. the Center for Veterinary Medicine, 21 CFR parts 510 and 558 are amended as AGENCY: Internal Revenue Service (IRS), § 1.103±12 [Removed] follows: Treasury. 3. Section 1.103–12 is removed. ACTION: Removal of final and temporary § 1.110±1 [Removed] PART 510ÐNEW ANIMAL DRUGS regulations. 4. Section 1.110–1 is removed. 1. The authority citation for 21 CFR SUMMARY: This document removes final § 1.114±1 [Removed] part 510 continues to read as follows: and temporary regulations as part of the 5. Section 1.114–1 is removed. Authority: Secs. 201, 301, 501, 502, 503, President’s Regulatory Reinvention 512, 701, 721 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321, 331, 351, 352, Initiative. § 1.115±1 [Removed] 353, 360b, 371, 379e). EFFECTIVE DATE: January 8, 1996. 6. Section 1.115–1 is removed. § 510.600 [Amended] FOR FURTHER INFORMATION CONTACT: § 1.116±1 [Removed] Philip Bennet, (202) 622–3926. 2. Section 510.600 Names, addresses, 7. Section 1.116–1 is removed. SUPPLEMENTARY INFORMATION: and drug labeler codes of sponsors of § 1.116±2 [Removed] approved applications is amended in Background 8. Section 1.116–2 is removed. the table in paragraph (c)(1) by removing the entry for ‘‘Whitmoyer As part of the President’s Regulatory § 1.367(a)±7T [Removed] Laboratories,’’ and in the table in Reinvention Initiative, the Treasury 9–10. Section 1.367(a)-7T is removed. paragraph (c)(2) by removing the entry Department and the IRS identified 11. The undesignated center heading for ‘‘011794’’. obsolete regulations that relate to prior preceding § 1.383–1A is removed. law, provide elections for prior years, or PART 558ÐNEW ANIMAL DRUGS FOR are otherwise outdated due to changes § 1.383±1A [Removed] USE IN ANIMAL FEEDS in the underlying statutory provisions. 12. Section 1.383–1A is removed. 3. The authority citation for 21 CFR List of Subjects § 1.383±2A [Removed] part 558 continues to read as follows: 26 CFR Part 1 13. Section 1.383–2A is removed. Authority: Secs. 512, 701 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Income taxes, Reporting and § 1.383±3A [Removed] 360b, 371). recordkeeping requirements. 14–15. Section 1.383–3A is removed. 516 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations

§ 1.804±1 [Removed] § 1.907(b)±1A [Removed] § 1.1301±0 [Removed] 16. Section 1.804–1 is removed. f. The entry for § 1.907(b)–1A is 50. Section 1.1301–0 is removed. removed. § 1.804±2 [Removed] § 1.1301±1 [Removed] 17–18. Section 1.804–2 is removed. § 1.907(b)±2A [Removed] 51. Section 1.1301–1 is removed. g. The entry for § 1.907(b)–2A is § 1.805±1 [Removed] § 1.1302±1 [Removed] removed. 19. Section 1.805–1 is removed. 52. Section 1.1302–1 is removed. § 1.907(c)±1A [Removed] § 1.805±2 [Removed] § 1.1302±2 [Removed] h. The entry for § 1.907(c)–1A is 53. Section 1.1302–2 is removed. 20. Section 1.805–2 is removed. removed. § 1.805±3 [Removed] § 1.1302±3 [Removed] § 1.907(c)±2A [Removed] 21. Section 1.805–3 is removed. 54. Section 1.1302–3 is removed. i. The entry for § 1.907(c)–2A is § 1.805±4 [Removed] removed. § 1.1303±1 [Removed] 55–56. Section 1.1303–1 is removed. 22. Section 1.805–4 is removed. § 1.907(c)±3A [Removed] § 1.805±5 [Removed] j. The entry for § 1.907(c)–3A is § 1.1304±1 [Removed] 23. Section 1.805–5 is removed. removed. 57. Section 1.1304–1 is removed. § 1.805±6 [Removed] § 1.907(d)±1A [Removed] § 1.1304±2 [Removed] 24. Section 1.805–6 is removed. k. The entry for § 1.907(d)–1A is 58. Section 1.1304–2 is removed. removed. § 1.805±7 [Removed] § 1.1304±3 [Removed] 25–26. Section 1.805–7 is removed. § 1.907(e)±1A [Removed] 59. Section 1.1304–3 is removed. l. The entry for § 1.907(e)–1A is § 1.1304±4 [Removed] § 1.805±8 [Removed] removed. 27. Section 1.805–8 is removed. 60. Section 1.1304–4 is removed. § 1.907(f)±1A [Removed] § 1.820±1 [Removed] § 1.1304±5 [Removed] m. The entry for § 1.907(f)–1A is 61. Section 1.1304–5 is removed. 28. Section 1.820–1 is removed. removed. § 1.1304±6 [Removed] § 1.820±2 [Removed] § 1.907(e)±1 [Removed] 62. Section 1.1304–6 is removed. 29. Section 1.820–2 is removed. 35. Section 1.907(e)–1 is removed. § 1.820±3 [Removed] 36. The undesignated center heading PART 20ÐESTATE TAX; ESTATES OF preceding § 1.907(a)–0A is removed. 30. Section 1.820–3 is removed. DECEDENTS DYING AFTER AUGUST 16, 1954 § 1.907(a)±0A [Removed] § 1.824±1 [Removed] § 20.2035±1 [Removed] 31. Section 1.824–1 is removed. 37. Section 1.907(a)–0A is removed. Par. 2. Section 20.2035–1 is removed. § 1.907(a)±1A [Removed] § 1.824±2 [Removed] 32. Section 1.824–2 is removed. 38. Section 1.907(a)–1A is removed. PART 23Ð[REMOVED] Par. 3. Part 23 is removed. § 1.824±3 [Removed] § 1.907(b)±1A [Removed] 33. Section 1.824–3 is removed. 39. Section 1.907(b)–1A is removed. PART 24Ð[REMOVED] 34. Section 1.907–0 is amended as § 1.907(b)±2A [Removed] follows: Par. 4. Part 24 is removed. a. The introductory text is revised to 40. Section 1.907(b)–2A is removed. PART 25ÐGIFT TAX; GIFTS MADE read as follows: § 1.907(c)±1A [Removed] AFTER DECEMBER 31, 1954 § 1.907±0 Outline of regulation provisions 41. Section 1.907(c)–1A is removed. for section 907. § 25.2517±1 [Removed] § 1.907(c)±2A [Removed] This section lists the paragraphs Par. 5. Section 25.2517–1 is removed. 42. Section 1.907(c)–2A is removed. contained in §§ 1.907(a)–0 through PART 27Ð[REMOVED] 1.907(f)–1. § 1.907(c)±3A [Removed] * * * * * 43. Section 1.907(c)–3A is removed. Par. 6. Part 27 is removed. b. The undesignated center heading PART 33Ð[REMOVED] preceding the entry for § 1.907(a)–0 is § 1.907(d)±1A [Removed] removed and the entry for § 1.907(e)–1 44. Section 1.907(d)–1A is removed. Par. 7. Part 33 is removed. is removed. c. The undesignated center heading § 1.907(e)±1A [Removed] PART 38Ð[REMOVED] preceding the entry for § 1.907(a)–0A is 45. Section 1.907(e)–1A is removed. Par. 8. Part 38 is removed. removed. § 1.907(f)±1A [Removed] PART 301ÐPROCEDURE AND § 1.907(a)±0A [Removed] 46. Section 1.907(f)–1A is removed. ADMINISTRATION d. The entry for § 1.907(a)–0A is § 1.995±7 [Removed] removed. Par. 9. Part 301 is amended as 47. Section 1.995–7 is removed. follows: § 1.907(a)±1A [Removed] 49. The undesignated center heading e. The entry for § 1.907(a)–1A is ‘‘INCOME AVERAGING’’ preceding § 301.6676±1 [Removed] removed. § 1.1301–0 is removed. 1. Section 301.6676–1 is removed. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 517

§ 301.7424±1 [Removed] another member. The regulations are transactions entered into by members of 2. Section 301.7424–1 is removed. needed to provide appropriate rules for a consolidated group. Comments were these transactions. The regulations received on the proposed regulations, PART 602ÐOMB CONTROL NUMBERS provide guidance for corporations that and a public hearing was held on UNDER THE PAPERWORK are members of consolidated groups. October 18, 1994. Most commentators REDUCTION ACT DATES: These regulations are effective believe that the proposed regulations provide a sensible and flexible set of Par. 10. In § 602.101, paragraph (c) is February 7, 1996. rules to deal with hedging operations by amended by removing the following For dates of applicability of these the members of a consolidated group of entries from the table: regulations, see § 1.446–4(e)(9)(iv) and § 1.1221–2(g) (4), (5), and (6). corporations. § 602.101 OMB Control numbers. FOR FURTHER INFORMATION CONTACT: Jo The most significant comment on the * * * * * Lynn Ricks of the Office of the Assistant regulations relates to their effective date. (c) * * * Chief Counsel (Financial Institutions Almost all of the commentators and Products), telephone (202) 622– requested a transition rule permitting CFR part or section where Current OMB 3920 (not a toll-free number). consolidated groups to elect to apply the identified and described control No. proposed character rules retroactively. SUPPLEMENTARY INFORMATION: The final regulations adopt this Paperwork Reduction Act suggestion, generally allowing ***** consolidated groups to elect to apply the 1.820±2 ...... 1545±0128 The collections of information single-entity approach of the proposed contained in these final regulations have regulations to all open years. Section ***** been reviewed and approved by the 1.1221–2, concerning the character of 1.824±1 ...... 1545±1027 Office of Management and Budget in hedging transactions, was made 1.824±3 ...... 1545±1027 accordance with the Paperwork retroactive for all open years to permit Reduction Act (44 U.S.C. 3507) under ***** the IRS to resolve fairly and consistently control number 1545–1480. Some 1.1304±1 ...... 1545±0074 controversies involving transactions that responses to these collections of 1.1304±3 ...... 1545±0074 were entered into prior to the information are mandatory, and others 1.1304±5 ...... 1545±0074 publication date of those regulations. It are required to obtain the benefit of the is appropriate that these regulations, as ***** separate-entity election or of applying an integral part of § 1.1221–2, also apply 20.2035±1 ...... 1545±0015 single-entity treatment in taxable years retroactively. To prevent any adverse prior to the general effective date of the consequences, however, retroactivity is ***** regulations. elective. 27.642±1 ...... 1545±0020 An agency may not conduct or The proposed regulations, with new sponsor, and a person is not required to ***** effective date provisions, are adopted as respond to, a collection of information 38.6302±1 ...... 1545±0257 final regulations. The new provisions, unless the collection of information and several comments that were not displays a valid control number. ***** adopted, are discussed below. The estimated annual burden per Margaret Milner Richardson, respondent or recordkeeper varies from Explanation of Provisions 1.0 to 40.0 hours, depending on Commissioner of Internal Revenue. Character Regulations Approved: December 18, 1995. individual circumstances, with an Leslie Samuels, estimated average of 5 hours. The final regulations retain the single- entity approach of the proposed Assistant Secretary of the Treasury. Comments concerning the accuracy of this burden estimate and suggestions for regulations. That is, they treat the risk [FR Doc. 96–164 Filed 1–5–96; 8:45 am] reducing this burden should be sent to of one member of the group as the risk BILLING CODE 4830±01±U the Internal Revenue Service, Attn: IRS of the other members, as if all the Reports Clearance Officer, T:FP, members were divisions of a single corporation. Thus, a member of a 26 CFR Parts 1 and 602 Washington, DC 20224, and to the Office of Management and Budget, Attn: consolidated group that hedges the risk [TD 8653] Desk Officer for the Department of the of another member by entering into a transaction with a third party may RIN 1545±AS75 Treasury, Office of Information and Regulatory Affairs, Washington, DC receive ordinary gain or loss treatment Hedging Transactions by Members of 20503. on that transaction if the transaction a Consolidated Group Books or records relating to this otherwise qualifies as a hedging collection of information must be transaction. AGENCY: Internal Revenue Service, retained as long as their contents may Under this single-entity approach, Treasury. become material in the administration intercompany transactions are neither ACTION: Final regulations. of any internal revenue law. Generally, hedging transactions nor hedged items. tax returns and tax return information Because they are treated as transactions SUMMARY: This document contains final are confidential, as required by 26 between divisions of a single regulations relating to the character and U.S.C. 6103. corporation, intercompany transactions timing of gain or loss from certain do not reduce the risk of that single hedging transactions entered into by Background corporation and, therefore, fail to members of a consolidated group. These On July 18, 1994, the IRS published qualify as hedging transactions. regulations apply when one member of in the Federal Register (59 FR 36394) a Some commentators requested that the group hedges its own risk, hedges notice of proposed rulemaking (FI–34– the IRS extend the single-entity the risk of another member, or enters 94) relating to the character and timing approach to apply the hedging rules to into a risk-shifting transaction with of gain or loss from certain risk-shifting a taxpayer’s transactions that hedge the 518 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations risk of a related party that is not a The final regulations expand upon the Third, if the taxpayer’s consolidated member of the taxpayer’s consolidated effective date provision of the proposed group has elected the single-entity group. The IRS and Treasury, however, regulations. The final regulations approach, the regulations nullify all do not believe that this approach is generally apply to transactions entered hedge identifications under § 1.1221– appropriate where the parties file into on or after March 8, 1996. 2(e)(i) that had been made for different tax returns. Accordingly, the In response to comments, the final intercompany transactions. In this final regulations do not adopt this regulations permit a consolidated group situation, the regulations determine the suggestion. to apply the single-entity approach of character of each intercompany The final regulations also retain the the regulations retroactively. The group transaction as if it had never been separate-entity election of the proposed may elect to begin to apply the single- identified as a hedging transaction. regulations, permitting a consolidated entity approach for all transactions Thus, the character and timing of the group to treat its members as separate entered into in any taxable year (the intercompany transaction are entities when applying the hedging election year) beginning prior to March determined under the otherwise rules. The election is made by attaching 8, 1996. The election may be made, applicable regulations, and the a statement to the group’s federal however, only if the election year and transaction is not subject to the income tax return. each subsequent taxable year are still ordinary-gain, capital-loss rule that For a group that elects separate-entity open for assessment under section 6501 generally applies to transactions that are treatment, an intercompany transaction on July 1, 1996, or such earlier date as incorrectly identified as hedging is treated as a hedging transaction if and the Commissioner may allow. Once transactions. The identification may, only if: (1) it would qualify as a hedging made, the single-entity election applies however, serve to identify the hedged transaction if entered into with an to all transactions entered into in the item. unrelated party; and (2) it is entered into election year and in all subsequent In order to ensure that consolidated with a member that, under its method consolidated return years until the date groups do not improperly use hindsight of accounting, marks its position in the as of which the group makes a separate- in making these identifications, the intercompany transaction to market. If entity election. The Service will publish regulations provide a consistency these requirements are satisfied, the guidance on the manner, and the time, requirement. Under this requirement, member with respect to which it is an for making the single-entity election. intercompany hedging transaction must the group members must treat similar or Further, the regulations also permit a account for its position in the identical transactions consistently consolidated group to apply the transaction under § 1.446–4, and, if that within the same year and from year to separate-entity approach to all member properly identifies the year. If a member of the consolidated transactions entered into in taxable transaction as a hedging transaction, group fails to identify a hedging years subject to the election. The each member treats the gain or loss from transaction as a hedging transaction, but taxpayer may choose, as the first year its position in the transaction as has identified similar or identical ordinary. under the election, any taxable year hedging transactions in the same or a In response to comments, the final beginning on or after July 12, 1995. This subsequent year, then, for purposes of regulations clarify that, even when these ability to apply the election to taxable § 1.1221–2(f)(2)(iii), the member two requirements are met, these years beginning before March 8, 1996 entering into the transaction is treated regulations supplant only the character allows a consolidated group to apply the as having no reasonable grounds for and timing rules of § 1.1502–13. Other separate-entity approach to all treating the transaction as other than a aspects of the transaction, such as the intercompany transactions that are hedging transaction. Thus, the member source of the gain or loss, are unaffected subject to new § 1.1502–13 (which is is generally subject to the ordinary-gain, by these regulations and thus may be effective for taxable years beginning on capital-loss rules for taxpayers who fail governed by § 1.1502–13. or after July 12, 1995). Thus, by electing to identify transactions as hedging As noted above, commentators separate-entity treatment for all transactions. transactions entered into in a taxable pointed out that taxpayers frequently Timing regulations enter into transactions to transfer their year beginning on or after July 12, 1995, business risk to related parties that do a consolidated group can determine the The final regulations clarify the not qualify as members of a character and timing of its general rule that was provided in the consolidated group. Some intercompany hedging transactions proposed regulations for the timing of commentators argued that, even if risk under § 1.446–4 and § 1.1221–2, rather the gain or loss from hedging reduction in these circumstances is not than under § 1.1502–13. transactions that are entered into by analyzed using a single-entity If the group makes the single-entity members of a consolidated group. Under perspective, the relationship between election or elects to apply the separate- the final regulations, a member of a the parties to the risk transfer justifies entity approach retroactively, special consolidated group must account for its a rule under which the party receiving identification rules apply. hedging transactions as if all the the risk has ordinary gain or loss on its First, the members of the group are members were separate divisions of a position in the transaction. That is, they required to identify transactions that single corporation (the single-entity wanted to apply one part of the were entered into prior to March 8, approach). Thus, the timing of the separate-entity rules to taxpayers that 1996, that are still in existence on that income, deduction, gain, or loss on the are not part of the same consolidated date, and that become hedging hedging transaction must match the group. transactions as a result of one of these timing of the income, deduction, gain, The IRS and Treasury, however, do elections. The members are also or loss from the item, items, or aggregate not believe that additional, special required to identify the hedged item for risk being hedged. These regulations character rules are appropriate for risk- these transactions. make clear that a member must account shifting transactions outside the context Second, the final regulations extend for all of its hedging transactions, not of a consolidated group. Accordingly, the time period for making the just those that hedge the risk of another the final regulations do not adopt these additional identifications that are member, under the single-entity comments. referred to in the preceding paragraph. approach. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 519

Since all of the members are treated Drafting Information intercompany hedging transactions (as as divisions of a single corporation, The principal author of these defined in § 1.1221–2(d)(2)(ii)) is taken intercompany transactions are neither regulations is Jo Lynn Ricks, Office of into account under the timing rules of hedging transactions nor hedged items. Assistant Chief Counsel (Financial § 1.446–4 rather than under the timing Thus, under the single-entity approach, Institutions and Products), IRS. rules of § 1.1502–13. the timing of the gain or loss from However, other personnel from the IRS (iii) Definitions. For definitions of intercompany transactions is not and Treasury Department participated consolidated group, divisions of a single determined under the rules of § 1.446– in their development. corporation, intercompany transaction, 4. and member, see section 1502 and the List of Subjects The final regulations also clarify the regulations thereunder. rule in the proposed regulations on 26 CFR Part 1 (iv) Effective date. This paragraph (e)(9) applies to transactions entered accounting for the gain or loss on Income taxes, Reporting and into on or after March 8, 1996. hedging transactions by members of a recordkeeping requirements. group that has made a separate-entity Par. 3. Section 1.1221–2 is amended election. If a group makes the separate- 26 CFR Part 602 by adding the text of paragraphs (d), entity election, the members do not Reporting and recordkeeping (e)(5), (f)(3), and (g)(4), and by adding account for their hedging transactions requirements. the text and headings of paragraphs (g) (5) and (6) to read as follows: (including their intercompany hedging Adoption of Amendments to the transactions) as if they were divisions of Regulations § 1.1221±2 Hedging transactions. a single corporation. Rather, each * * * * * member accounts for its hedging Accordingly, 26 CFR parts 1 and 602 (d) Hedging by members of a transactions on a member-by-member are amended as follows: consolidated group—(1) General rule: basis. For example, if an intercompany PART 1ÐINCOME TAXES single-entity approach. For purposes of transaction is treated as a hedging this section, the risk of one member of transaction, the gain or loss on the Paragraph 1. The authority citation a consolidated group is treated as the for part 1 is amended by removing the transaction is accounted for under the risk of the other members as if all of the entry for § 1.1221–2 and by adding rules of § 1.446–4 rather than under the members of the group were divisions of entries in numerical order to read as timing rules of the intercompany a single corporation. For example, if any follows: transaction regulations, § 1.1503–13. As member of a consolidated group hedges was stated above, even when a separate- Authority: 26 U.S.C. 7805 * * * the risk of another member of the group entity election is in place, §§ 1.1221–2 Section 1.446–4 also issued under 26 by entering into a transaction with a and 1.446–4 affect only the timing and U.S.C. 1502. * * * third party, that transaction may character of intercompany hedging Section 1.1221–2 also issued under 26 U.S.C. 1502 and 6001. * * * potentially qualify as a hedging transactions. Other aspects of the transaction. Conversely, intercompany intercompany hedging transaction Par. 2. Section 1.446–4 is amended by transactions are not hedging remain subject to the rules of § 1.1502– adding the text of paragraph (e)(9) to transactions because, when considered 13. read as follows: as transactions between divisions of a These final timing regulations are § 1.446±4 Hedging transactions. single corporation, they do not reduce effective for transactions entered into on * * * * * the risk of that single corporation. or after March 8, 1996. (e) * * * (2) Separate-entity election. In lieu of Special Analyses (9) Hedging by members of a the single-entity approach specified in consolidated group—(i) General rule: paragraph (d)(1) of this section, a It has been determined that this single-entity approach. In general, a consolidated group may elect separate- Treasury decision is not a significant member of a consolidated group must entity treatment of its hedging regulatory action as defined in EO account for its hedging transactions as if transactions. If a group makes this 12866. Therefore, a regulatory all of the members were separate separate-entity election, the following assessment is not required. It is hereby divisions of a single corporation. Thus, rules apply. certified that these regulations do not the timing of the income, deduction, (i) Risk of one member not risk of have a significant economic impact on gain, or loss on a hedging transaction other members. Notwithstanding a substantial number of small entities. must match the timing of income, paragraph (d)(1) of this section, the risk This certification is based on the fact deduction, gain, or loss from the item or of one member is not treated as the risk that these regulations will primarily items being hedged. Because all of the of other members. affect affiliated groups of corporations members are treated as if they were (ii) Intercompany transactions. An that have elected to file consolidated divisions of a single corporation, intercompany transaction is a hedging returns, which tend to be larger intercompany transactions are neither transaction (an intercompany hedging businesses. The regulations do not hedging transactions nor hedged items transaction) with respect to a member of significantly alter the reporting or for these purposes. a consolidated group if and only if it recordkeeping duties of small entities. (ii) Separate-entity election. If a meets the following requirements— Therefore, a Regulatory Flexibility consolidated group makes an election (A) The position of the member in the Analysis under the Regulatory under § 1.1221–2(d)(2), then paragraph intercompany transaction would qualify Flexibility Act (5 U.S.C. chapter 6) is (e)(9)(i) of this section does not apply. as a hedging transaction with respect to not required. Pursuant to section 7805(f) Thus, in that case, each member of the the member (taking into account of the Internal Revenue Code, the notice consolidated group must account for its paragraph (d)(2)(i) of this section) if the of proposed rulemaking preceding these hedging transactions in a manner that member had entered into the transaction regulations was submitted to the Small meets the requirements of paragraph (b) with an unrelated party; and Business Administration for comment of this section. For example, the income, (B) The position of the other member on its impact on small business. deduction, gain, or loss from (the marking member) in the transaction 520 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations is marked to market under the marking prescribes, the election described in this corporation, group, intercompany member’s method of accounting. paragraph (d)(2) must be made in a transactions, and member, see section (iii) Treatment of intercompany separate statement saying ‘‘[Insert Name 1502 and the regulations thereunder. hedging transactions. An intercompany and Employer Identification Number of (4) Examples. The following examples hedging transaction (that is, a Common Parent] HEREBY ELECTS THE illustrate this paragraph (d): transaction that meets the requirements APPLICATION OF SECTION 1.1221– of paragraphs (d)(2)(ii) (A) and (B) of 2(d)(2) (THE SEPARATE-ENTITY General Facts. In these examples, O and H this section) is subject to the following APPROACH).’’ The statement must also are members of the same consolidated group. O’s business operations give rise to interest rules— indicate the date as of which the rate risk ‘‘A,’’ which O wishes to hedge. O (A) The character and timing rules of election is to be effective. The election enters into an intercompany transaction with § 1.1502–13 do not apply to the income, must be signed by the common parent H that transfers the risk to H. O’s position in deduction, gain, or loss from the and filed with the group’s federal the intercompany transaction is ‘‘B,’’ and H’s intercompany hedging transaction; and income tax return for the taxable year position in the transaction is ‘‘C.’’ H enters (B) Except as provided in paragraph that includes the first date for which the into position ‘‘D’’ with a third party to reduce (f)(3) of this section, the character of the election is to apply. The election applies the interest rate risk it has with respect to its marking member’s gain or loss from the to all transactions entered into on or position C. D would be a hedging transaction transaction is ordinary. after the date so indicated. with respect to risk A if O’s risk A were H’s (iv) Making and revoking the election. (3) Definitions. For definitions of risk. Unless the Commissioner otherwise consolidated group, divisions of a single BILLING CODE 4830±01±U

BILLING CODE 4830±01±C account under the rules of section 1502. D is party must identify the hedging Example 1. Single-entity treatment—(i) not a hedging transaction with respect to A, transaction under paragraph (e)(1) of General rule. Under paragraph (d)(1) of this but D may be a hedging transaction with this section. Under paragraph (e)(2) of section, O’s risk A is treated as H’s risk, and respect to C if C is ordinary property or an this section, that member must also therefore D is a hedging transaction with ordinary obligation and if the other requirements of paragraph (b) of this section identify the item, items, or aggregate respect to risk A. Thus, the character of D is risk that is being hedged, even if the determined under the rules of this section, are met. If D is not part of a hedging and the income, deduction, gain, or loss from transaction, then D may be part of a straddle item, items, or aggregate risk relates D must be accounted for under a method of for purposes of section 1092. primarily or entirely to other members accounting that satisfies § 1.446–4. The Example 3. Separate-entity election; of the group. If the members of a group intercompany transaction B–C is not a counterparty that marks to market. The facts use intercompany transactions to hedging transaction and is taken into account are the same as in Example 2 above, except transfer risk within the group, the under § 1.1502–13. that H marks C to market under its method of accounting. Also assume that B would be requirements of paragraph (e)(2) of this (ii) Identification. D must be section may be met by identifying the identified as a hedging transaction a hedging transaction with respect to risk A if O had entered into that transaction with an intercompany transactions, and the risks under paragraph (e)(1) of this section, unrelated party. Thus, for O, the B–C hedged by the intercompany and A must be identified as the hedged transaction is an intercompany hedging transactions, as hedges or hedged items, item under paragraph (e)(2) of this transaction with respect to O’s risk A, the as appropriate. Because identification of section. Under paragraph (e)(5) of this character and timing rules of § 1.1502–13 do the intercompany transaction as a hedge section, the identification of A as the not apply to the B–C transaction, and H’s serves solely to identify the hedged hedged item can be accomplished by income, deduction, gain, or loss from C is ordinary. However, other attributes of the item, the identification is timely if made identifying the positions in the within the period required by paragraph intercompany transaction as hedges or items from the B–C transaction are determined under § 1.1502–13. D is a (e)(2) of this section. For example, if a hedged items, as appropriate. Thus, hedging transaction with respect to C if it member transfers risk in an substantially contemporaneous with meets the requirements of paragraph (b) of intercompany transaction, it may entering into D, H may identify C as the this section. identify under the rules of this hedged item and O may identify B as a (e) * * * paragraph (e) both its position in that hedge and A as the hedged item. (5) Identification of hedges involving transaction and the item, items, or Example 2. Separate-entity election; members of a consolidated group—(i) aggregate risk being hedged. The counterparty that does not mark to market. General rule: single-entity approach. A member that hedges the risk outside the In addition to the General Facts stated above, member of a consolidated group must group may identify under the rules of assume that the group makes a separate- satisfy the requirements of this this paragraph (e) both its position with entity election under paragraph (d)(2) of this section. If H does not mark C to market under paragraph (e) as if all of the members of the third party and its position in the its method of accounting, then B is not a the group were divisions of a single intercompany transaction. Paragraph hedging transaction, and the B–C corporation. Thus, the member entering (d)(4) Example 1 of this section intercompany transaction is taken into into the hedging transaction with a third illustrates this identification. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 521

(ii) Rule for consolidated groups each subsequent taxable year, are still paragraph (e)(5) of this section a making the separate-entity election. If a open for assessment under section 6501 transaction that— consolidated group makes the separate- on July 1, 1996 (or such earlier date as (A) Was entered into before March 8, entity election under paragraph (d)(2) of the Commissioner may allow). The 1996, this section, each member of the group election applies to all transactions (B) When entered into was not a must satisfy the requirements of this entered into in the election year and in hedging transaction (as defined in paragraph (e) as though it were not a all subsequent consolidated return years paragraph (b) of this section), member of a consolidated group. until the date, if any, as of which the (C) Solely as a result of the group’s * * * * * group makes a separate-entity election under paragraph (d)(2) of this section. election under paragraph (g)(5)(i) or (ii) (f) * * * of this section, is a hedging transaction (3) Transactions by members of a The rules of paragraph (g)(6) of this section apply to all transactions that (as defined in paragraph (b) of this consolidated group—(i) Single-entity section), and approach. If a consolidated group is were entered into before March 8, 1996 under the general rule of paragraph in taxable years subject to an election (D) Remains in existence on March 8, (d)(1) of this section (the single-entity under this paragraph (g)(5)(i). The 1996. approach), the rules of this paragraph (f) election may be revoked only with the (iii) Additional identification of apply only to transactions that are not consent of the Commissioner. hedged items. In the case of transactions intercompany transactions. (ii) Ability to apply the separate-entity described in paragraph (g)(6)(ii) of this (ii) Separate-entity election. If a approach retroactively. Notwithstanding section, the hedging member must consolidated group has made the paragraph (g)(4) of this section, the identify under paragraph (e)(5) of this election under paragraph (d)(2) of this separate-entity election described in section the item, items, or aggregate risk section, then, in addition to the rules of paragraph (d)(2) of this section may be being hedged. paragraphs (f) (1) and (2) of this section, made for any taxable year beginning on (iv) Consistency requirement for the following rules apply. or after July 12, 1995. If that election is hedge identifications. In identifying (A) If an intercompany transaction is made for a taxable year beginning before transactions as hedging transactions identified as a hedging transaction but March 8, 1996, then paragraphs (d)(2) under paragraph (g)(6)(ii) of this section, does not meet the requirements of and (3), (e)(5)(ii), and (f)(3)(ii) of this all of the members of the group must paragraphs (d)(2)(ii) (A) and (B) of this section apply to all transactions entered treat similar or identical transactions section, then, notwithstanding any into on or after the beginning of that consistently within the same year and contrary provision in § 1.1502–13, each taxable year and while the election is in from year to year. If paragraph (g)(6)(ii) party to the transaction is subject to the effect, and the rules of paragraph (g)(6) of this section requires a member to rules of paragraph (f)(1) of this section of this section (other than paragraph identify a transaction, and the member with respect to the transaction as though (g)(6)(i)) apply to all transactions that fails to identify a transaction as a it had incorrectly identified its position were entered into on or after the first hedging transaction, but it or another in the transaction as a hedging day of the first year for which the member of the group identifies similar transaction. election is made and before March 8, or identical hedging transactions in the (B) If a transaction meets the 1996. same or a subsequent year, then for requirements of paragraphs (d)(2)(ii) (A) (6) Transitional identification rules. purposes of paragraphs (f)(2)(iii) and (3) and (B) of this section but the To allow a consolidated group to of this section, the member entering into transaction is not identified as a hedging conform to paragraphs (g)(5)(i) and (ii) the transaction is treated as having no transaction, each party to the of this section, this paragraph (g)(6) reasonable grounds for treating the transaction is subject to the rules of nullifies certain hedge identifications transaction as other than a hedging paragraph (f)(2) of this section. (Because and permits a member of a consolidated transaction. the transaction is an intercompany group to add certain hedge (v) Extension of time for making hedging transaction, the character and identifications. This paragraph (g)(6) additional identifications. If an timing rules of § 1.1502–13 do not applies only to the extent provided in identification of a hedging transaction apply. See paragraph (d)(2)(iii)(A) of paragraph (g)(5) of this section. would not be required but for the rules this section.) (i) Intercompany transactions of paragraph (g)(6)(ii) of this section, the (g) * * * previously identified. Notwithstanding identification is timely for purposes of (4) Effective date and transition rules paragraph (f)(1)(i) of this section, if, for paragraph (e)(1) of this section if made for hedges by members of a purposes of paragraph (e)(1) of this before the close of business on May 7, consolidated group. Paragraphs (d), section, a member identified as a 1996. If an identification of a hedged (e)(5), and (f)(3) of this section apply to hedging transaction an intercompany item would not be required but for the transactions entered into on or after transaction (or a transaction that would rules of paragraph (g)(6)(iii) of this March 8, 1996. qualify as an intercompany transaction section, it is timely for purposes of (5) Elections to accelerate the effective under § 1.1502–13(b)(1) if the taxable paragraph (e)(2) of this section if made date of the regulations—(i) Election to year in which the transaction was before the close of business on the later apply the single-entity approach entered into were described in § 1.1502– of May 7, 1996 or the last day of the retroactively. A consolidated group may 13(l)), the character of the gain on the period specified in paragraph (e)(2)(ii) elect to begin to apply paragraphs (d)(1) intercompany transaction is determined of this section. and (3), (e)(5)(i), and (f)(3)(i) of this as if it had not been identified as a section to all transactions entered into hedging transaction. The identification PART 602ÐOMB CONTROL NUMBERS in any taxable year (the election year) may, however, serve to identify the UNDER THE PAPERWORK beginning prior to March 8, 1996. This hedged item under paragraph (e)(5)(i) of REDUCTION ACT election must be made in the manner, this section. and at the time, prescribed by the (ii) Additional identifications of Par. 4. The authority citation for part Commissioner. A group may make the hedging transactions. A member of a 602 continues to read as follows: election only if the election year, and consolidated group must identify under Authority: 26 U.S.C. 7805. 522 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations

Par. 5. In § 602.101, paragraph (c) is designations for American wines bottled FR 13623, March 31, 1982]. According amended by adding entries in numerical prior to January 1, 1997. Alternative to its charter, the Committee was to order to the table to read as follows: names listed at § 4.92(b) may be used as advise the Director of the grape varieties designations for American wines bottled and subvarieties which are used in the § 602.101 OMB Control numbers. prior to January 1, 1999. production of wine, to recommend * * * * * FOR FURTHER INFORMATION CONTACT: appropriate label designations for these (c) * * * Charles N. Bacon, Wine, Beer, and varieties, and to recommend guidelines Spirits Regulations Branch, Bureau of for approval of names suggested for new Current OMB CFR part or section where control num- Alcohol, Tobacco and Forearms, 650 grape varieties. Their recommendations identified and described ber Massachusetts Avenue, NW, were restricted to grape names used in Washington, DC 20226; Telephone (202) the production of American wines. The 927–8230. Committee’s final report, presented to ***** the Director in September 1984, 1.1221±2(d)(2)(iv) ...... 1545±1480 SUPPLEMENTARY INFORMATION: contained their findings regarding use of 1.1221±2(e)(5) ...... 1545±1480 Background the most appropriate names for 1.1221±2(g)(5)(ii) ...... 1545±1480 domestic winegrapes varieties. ATF 1.1221±2(g)(6)(ii) ...... 1545±1480 The Federal Alcohol Administration Act 1.1221±2(g)(6)(iii) ...... 1545±1480 announced that the Committee’s report Section 105(e) of the Federal Alcohol was available to the public in Notice No. ***** Administration Act (FAA Act), 27 548 [49 FR 44049], published on U.S.C. 205(e), vests broad authority in November 1, 1984. the Director, as a delegate of the Margaret Milner Richardson, Notice No. 581 Commissioner of Internal Revenue. Secretary of the Treasury, to prescribe regulations intended to prevent On the basis of the recommendations Approved: December 20, 1995. deception of the consumer, and to contained in the Committee’s final Cynthia G. Beerbower, provide the consumer with adequate report, ATF issued Notice No. 581 on Deputy Assistant Secretary of the Treasury. information as to the identity and February 4, 1986 [51 FR 4392]. This [FR Doc. 96–178 Filed 1–5–96; 8:45 am] quality of the product. Regulations notice proposed the addition of Subpart BILLING CODE 4830±01±U which implement the provisions of J, American Grape Variety Names, to section 105(e) as they relate to wine are Part 4. Within this subpart, § 4.91 set forth in title 27, Code of Federal contained the list of prime grape names Bureau of Alcohol, Tobacco and Regulations, Part 4 (27 CFR part 4). which the Committee had found to be Firearms the most appropriate names for grape Wine Varietal Labeling varieties. Sections 4.92 and 4.93 27 CFR Part 4 Under § 4.34(a), still grape wine may contained alternative names which [T.D. ATF±370; Ref. Notice Nos. 749, 581] be designated by labeling the wine with could be used in conjunction with the the predominant grape(s) from which prime name (§ 4.92), or for five years, in RIN 1512±AA67 the wine is produced. Since 1983, lieu of the prime name (§ 4.93). Section Grape Variety Names for American labeling rules at § 4.23a have provided 4.94 contained guidelines for adding Wines for the use of a grape variety name as new grape variety names to the list of the type designation of the wine if not prime names. AGENCY: Bureau of Alcohol, Tobacco less than 75 percent of the wine is In addition to the recommendations and Firearms, Department of the derived from the labeled grape variety included in the Committee report, Treasury. (less in the case of wine made from Notice No. 581 contained other ACTION: Final rule; Treasury decision. certain Vitis labrusca grapes), and if the proposals. One was to prohibit the wine is labeled with an appellation of modification of grape variety names SUMMARY: The Bureau of Alcohol, origin. Wine may also be labeled with with color or style descriptive terms or Tobacco and Firearms (ATF) is issuing the names of two or more grape varieties with proprietary names. This notice also a final rule containing a list of approved if all of the grapes used to make the proposed to make obsolete certain IRS prime grape variety names which may wine are of the labeled varieties, and the and ATF rulings relating to grape wine be used as the designation for American percentage of wine derived from each designations. The comment period for wines. This rule contains two other lists variety is shown on the label. Notice No. 581 was extended until July of alternative names which may be used In recent years, ATF has noted a trend 7, 1986, by the publication of Notice No. as grape wine designations until January among domestic and foreign wineries to 589, April 8, 1986 [51 FR 11944]. 1, 1997, or January 1, 1999. This rule label wines using a grape variety Written Comments also contains a procedure by which designation. Increasing use of hundreds interested persons may petition the of grape variety names and synonyms ATF received 156 comments from 146 Director for the addition of names to the prompted ATF to examine the different respondents prior to the end of list of prime grape names. correctness of using these names in the comment period on July 7, 1986. ATF believes the listing of approved order to insure that grape variety names Comments were received from: 76 names of grape varieties for American used are truthful, accurate, and not consumers; the American Wine Society; wines will help standardize wine label misleading. 38 American wineries; the Wine terminology and prevent consumer Institute; the Association of American confusion by reducing the large number Winegrape Varietal Names Advisory Vintners; the Washington Wine of synonyms for grape varieties Committee Institute; six grape growers; the currently used for labeling American In 1982, ATF established the California Farm Bureau Federation; the wines. Winegrape Varietal names Advisory California Association of Winegrape DATES: This final rule is effective Committee (‘‘Committee’’) to conduct an Growers; the North Carolina Grape February 7, 1996. Alternative names examination of the hundreds of grape Growers Association; the Oregon listed at § 4.92(a) may be used as variety names and synonyms in use [47 Winegrowers Association; two United Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 523

States Congressmen; the Embassy of viticultural use in the United States 4. Bruce Reisch, Associate Professor, New France; the Embassy of the Federal since publication of the Committee York State Agricultural Experiment Station, Republic of Germany; four foreign wine report. Cornell University at Geneva. producing or exporting companies or 5. R.P. Lane, Associate Professor, Georgia Changes to the List of Prime Names Agricultural Experiment Stations, University associations; the publication Wine East; of Georgia at Griffin. a wine writer; four persons involved in ATF proposed certain changes to the 6. Delegation of the Commission of the academic research or classification of list of prime names, through the European Communities (‘‘EC’’). wine; and four members of the deletion of names which are not the true 7. The Agricultural Counselor, Embassy of Winegrape Varietal Names Advisory names of grape varieties, and through France, Washington, DC. Committee. the addition of certain grape names 8. The Ambassador, Federal Republic of Eleven respondents commented which were previously proposed as Germany, Washington, DC. generally in favor of Notice No. 581, and alternative names. 9. The Counselor for Economic and the proposal to establish a list of wine Commercial Affairs, the Embassy of Spain, grape variety names for domestic use. Approval of New Grape Names Washington, DC. 10. Deutscher Weinfonds, a German quasi- Conversely, a large number of ATF proposed minor changes to the governmental authority (‘‘DW’’). respondents opposed the concept of method of approving new grape names, 11. Verband Deutscher Weinexporteure establishing a list of grape varieties, primarily to provide more flexibility for e.V., and Deutscher Weinbauverband e.V., while many objected to specific grape breeders in naming new varieties. trade associations representing exporters of proposals such as the elimination of German wine, and German wine growers. certain varietal names, and the proposal Gamay Beaujolais 12. Office International de la Vigne et du to prohibit use of color or style No regulatory proposals were made Vin, an international trade association for descriptors in conjunction with grape for Gamay Beaujolais. ATF stated that wine (‘‘OIV’’). variety names. Because of the general 13. Union Interprofessionelle des Vins du Gamy Beaujolais would be the subject of Beaujolais. opposition to the proposals made in future rulemaking. In the interim, 14. Fe´de´ration des Exportateurs de Vins et Notice No. 581, ATF decided to reopen domestic wineries and bottlers could Spiritueux de France, a French trade comment on the subject of grape variety continue to use Gamay Beaujolais on association (‘‘FEVS’’). names. At the same time, ATF modified wine labels. ATF made proposals 15. Institut National des Appellations certain proposals made in that notice. regarding the use of Gamay Beaujolais d’Origine, a French organization concerned with recognition of controlled appellations of Notice No. 749 in Notice No. 793 [59 FR 15878, April 5, 1994]. origin (‘‘INAO’’). Background 16. American Vintners Association, a trade Color and Style Descriptors association representing bonded wineries ATF issued Notice No. 749 on (‘‘AVA’’). September 3, 1992 [57 FR 40380]. ATF eliminated the proposal to 17. National Association of Beverage Although the comment period for this prohibit the use of descriptive or Importers, a trade association representing notice was to have closed on October 5, proprietary terms with grape variety importers of alcoholic beverages (‘‘NABI’’). 1992, several respondents requested its names. 18. Wine Institute, a trade association extension. Notice No. 762, October 26, representing California wineries. Type Designations of Varietal 19. Washington Wine Commission, a trade 1992 [57 FR 48487], reopened the Significance comment period until December 28, association representing Washington 1992. The proposals in Notice No. 749 Notice No. 749 proposed a new type wineries and winegrape growers. 20. Oregon Winegrower’s Association, a differed from those made in Notice No. designation for American wines. These names would designate wines which trade association representing Oregon 581 in the following respects. winegrape growers. have some varietal basis, but are not One List of Alternative Names 21. California Association of Winegrape composed of a specified grape variety Growers, a trade association representing ATF reduced the two lists of such as Muscatel which could be California winegrape growers. alternative grape variety names to a produced using any Muscat grapes. 22. Richard Mansfield, Umpqua Valley single list. This list proposed at § 4.92 Chapter, Oregon Winegrowers Association, a contained grape names which would be Respondents to Notice No. 749 trade association. phased out by January 1, 1997. A few ATF received 55 written comments 23. The U.S. Small Business alternative grape names listed in Notice from 43 respondents. The following is a Administration, Washington, DC. No. 581 were proposed as prime grape list of respondents, their general interest 24. Chicago Wine School, Chicago, IL. 25. Raymond Kelly, a consumer, names, or as synonyms for prime names. in the proposals in the notice, and, Alexandria, Virginia. when appropriate, an abbreviation or Synonyms for Prime Names 26. H. Sichel So¨hne, Inc., a wine import acronym. For the purpose of brevity, company. The proposed list of prime names of these abbreviations or acronyms are 27. Eagle Ridge Winery, a California grape varieties contained synonyms for used throughout this document to winery. some prime names. These synonyms, identify respondents. Following the list 28. Lockwood, a California wine producer. such as ‘‘Fume´ blanc’’ (a synonym for of respondents are organizations and 29. Mt. Palomar Winery, a California Sauvignon blanc), would be acceptable terms which are also used in this winery. designations for wine as long as they document. Abbreviations and acronyms 30. Cain Cellars, a California winery. 31. Wine World Estates, owner of four appeared in direct conjunction with an accompany these names as well. appellation of origin on a wine label. California wineries. 1. H.P. Olmo, Professor Emeritus, 32. Stimson Lane Wine & Spirits, Ltd., Additional Grape Variety Names University of California at Davis, and owner of wineries in Washington State and Committee member. California (‘‘Stimson Lane’’). ATF proposed additional grape names 2. William F. Doering, a Committee 33. Daniel Gehrs Wines, a California wine for inclusion on the list of prime names. member. producer (‘‘Gehrs’’). These names represent newly developed 3. Carole P. Meredith, Associate Professor, 34. Millbrook Winery, a New York winery. varieties as well as some European Department of Viticulture and Ecology, 35. Robert Mondavi Winery, a California vinifera grapes introduced into University of California at Davis. winery (‘‘Mondavi’’). 524 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations

36. Long Vineyards, a California wine awareness, while Mondavi stated their Daniel Gehrs Wines commented that producer. overall support of improving labeling California has many acres of grapes 37. Martin Brothers Winery, a California terminology and preventing consumer historically identified as ‘‘Pinot blanc.’’ winery. Wine made from these grapes has been 38. Amity Vineyards, an Oregon winery. deception and confusion. 39. Guenoc Winery, a California winery. marketed as Pinot blanc wine. Gehrs Conclusion: Issuance of a Final Rule on noted that wine produced from these 40. Brown-Forman Corporation, a wine and Grape Variety Names distilled spirits producer and importer grapes does not resemble wine made (‘‘Brown-Forman’’). Based on the overall favorable from Pinot blanc grapes; thus, this wine 41. Heublein Inc., a wine and distilled comments to the proposals made in receives poor consumer recognition due spirits producer and importer. Notice 749, ATF is issuing these final to consumers’ expectation of a white 42. General Vineyard Services, a California regulations on grape variety names. burgundy-type wine. winegrape grower. These regulations are intended to Recent ampelographic identification 43. San Lucas Vineyards, a California winegrape grower. provide specific and accurate labeling of of these so-called Pinot blanc grapes has grape wines labeled with grape variety revealed them to be the variety Melon. Organizations and References names. They are intended to prevent In the interest of accurately identifying A. Winegrape Varietal Names Advisory consumer deception by eliminating their wines, winemakers are now faced Committee (‘‘Committee’’). misnamed grape variety names, and by with the task of marketing wine made B. Foundation Plant Materials Service eliminating the use of many synonyms from these so-called Pinot blanc grapes (‘‘FPMS’’), a service of the University of for prime grape names. They are as Melon wine. Gehrs, the Wine California at Davis which lists registered expected to aid in the identification of Institute, and General Vineyard Services grape selections. The November 1, 1993, grape wines by consumers and to make objected to using the variety name California Grape Register is used as reference. Melon to label a grape wine. They noted C. A Practical Ampelography, Grapevine labels easier to understand through the Identification, by Pierre Galet, c. 1979, use of more meaningful labeling terms. that consumers are not familiar with the Cornell University Press (‘‘Galet’’). Finally, ATF believes these regulations name Melon, and that consumers do not D. Vines, Grapes and Wines, by Jancis will enable consumers to be better associate this term with a grape wine; Robinson, c. 1986, Alfred A. Knopf informed about wines and the grape rather consumers equate the word (‘‘Robinson’’). varieties used to produce them. Melon with a fruit. These respondents requested that Muscadet be listed as a General Comments to Notice No. 749 There are changes made in this final rule from the regulations proposed in synonym for Melon. They stated that Sixteen respondents specifically Notice No. 749 and from those first Melon is the grape of the Loire region stated their support for the proposals proposed in Notice No. 581. The used to produce Muscadet wines and made in Notice No. 749. Other changes are a result of comments made that millions of cases of Melon wine are respondents commented on specific by respondents over a lengthy period of sold each year under the Muscadet proposals by requesting changes to time. These changes recognize certain designation. Thus, there would be better particular aspects of the proposals. No marketing realities, and take into consumer understanding of wine made respondents generally opposed the consideration past and present with Melon grapes if it were labeled proposed regulations. recognition of names used and known Muscadet since consumers are familiar NABI stated their support of ATF’s with the type of wine now labeled intentions to prevent consumer by consumers and industry. Following is a summary of the proposals, written Muscadet. Gehrs stated that Muscadet confusion by reducing the number of used as a variety name would convey synonyms for grape varieties currently comments, and changes made as a result of those comments. useful information to consumers about used in labeling American wines. The the style and taste of the wine while EC likewise concurred with ATF’s Prime Names and Synonyms listed in Melon would not. decision to standardize wine grape § 4.91 Furthermore, Gehrs noted that names and to eliminate incorrect or California wineries must redesignate General misnamed varieties. The Embassy of their existing ‘‘Pinot blanc’’ grapes, a France expressed their support of ATF’s Notice No. 749 contained a list of process which will impose an economic objective to prevent confusion or prime grape names and synonyms listed burden on producers. By authorizing misunderstanding for consumers by in alphabetical order in § 4.91. Either Muscadet as a synonym for Melon, it reducing the number of synonyms for the prime name or a synonym listed would be easier for them to phase out grape variety names, and for requiring could be used standing alone on a label the name Pinot blanc and switch to the accurate use of those names. NABI as the designation for a wine. ATF Muscadet. The Wine Institute noted that favored ATF’s stated goal that grape received many comments concerning Muscadet is unlike other similar- variety names used by domestic the listing of prime grape names in sounding designations such as Muscatel wineries be truthful, accurate, and not § 4.91. Comments requesting that new or or Muscadine, that Muscadet does not misleading. additional names be added to the list are resemble these wines, and that Wine Institute supported ATF’s discussed under the ‘‘New grape variety Muscadet is not likely to be sold under attempt to issue regulations which strike names’’ section of the preamble. the same circumstances as these other a balance between ampelography (the Comments addressing the use of wines. Thus, consumer confusion study and classification of grape vines), synonyms for the prime names listed in among these names would be minimal. scientific terms, and consumer § 4.91 are discussed below. ATF finds that Galet uses the names understanding. The Oregon Melon and Muscadet interchangeably in Winegrower’s Association stated they Melon/Muscadet his Practical Ampelography, and that were supportive of ATF’s approach to Three respondents requested that other ampelographic sources list them regulation of varietal names and Muscadet be listed as a synonym for the as synonyms. However, ATF can find no acknowledged the problems of prime name Melon. A fourth respondent evidence of use of the name Muscadet regulating such names for the first time. requested that the full name ‘‘Melon de to designate wine made from this grape Stimson Lane cited ATF’s concern for Bourgogne’’ be listed as the prime name in the United States. While its use might ampelographic accuracy and consumer for this grape variety. avoid some of the problems inherent Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 525 with a wine designated Melon, ATF is listing Fume´ blanc as a synonym Texas winery which requested the historical past usage does not support for the prime name Sauvignon blanc in addition of ‘‘Primitivo de Gioia’’ to the the name Muscadet for domestic wines. § 4.91. list. ATF proposed Primitivo rather than Thus, ATF is not listing Muscadet as a Each of these respondents requested a name incorporating one of the many synonym for Melon in § 4.91. that ATF prohibit the term ‘‘Fume´’’ from clones or regional names for this grape In their comment, Eagle Ridge Winery being used with any other grape variety in order not to introduce foreign place requested that the full name ‘‘Melon de name. The AVA stated that Fume´ blanc names as part of a grape variety name Bourgogne’’ be listed as the prime name has gained wide consumer acceptance, used in the United States. for this grape variety. ATF finds that but that allowing ‘‘Fume´’’ to be used Information available to ATF at the Melon de Bourgogne is the actual name with other grape varieties would lead to time Notice No. 749 was published of this variety which reflects the origin unintended consumer confusion with indicated that Primitivo and Zinfandel of this grape in Burgundy. Although Fume´ blanc. They stated this action were separate grape varieties rather than modern wine labeling seldom would hurt wineries that have invested different names for the same grape incorporates the full name of this grape, time and money establishing consumer although ATF sought additional it is entirely accurate to use the full recognition for Fume´ blanc. Mondavi information on this issue. Five name. Furthermore, ATF believes that concurred that permitting ‘‘Fume´’’ to be respondents commented on the consumers are less likely to associate a used with other grape varieties would relationship between these two grape wine labeled as Melon de Bourgogne lead to consumer confusion. They stated names. with the fruit melon. Although this that Fume´ blanc must be viewed as a Carol P. Meredith, of the Department variety incorporates the geographic whole, indivisible term meaning of Viticulture and Enology at the place name ‘‘Bourgogne,’’ the required Sauvignon blanc. Mondavi cited its University of California at Davis, use of an appellation of origin with a financial commitment in building the commented that DNA examination of grape variety name would serve to success of Fume´ blanc wines, and stated these two varieties showed them to have dispel any erroneous impression about that introduction of other varieties the identical ‘‘fingerprint.’’ This the true origin of the wine which might labeled with the term ‘‘Fume´’’ would technique is currently being utilized as otherwise arise, provided the destroy the level of consumer an aid in identifying grapes since each ´ appellation of origin is in strict recognition of the name Fume blanc and grape variety reveals a unique DNA compliance with the requirements of impose significant financial harm on ‘‘fingerprint.’’ She commented that UC § 4.34(b). Mondavi and other wineries. Davis research on Primitivo is limited to Thus, subject to the condition that the ATF agrees in part. ‘‘Fume´’’ is a two accessions of Primitivo grapes from requirements of § 4.34(b) are strictly descriptive term which, through Italy, and that these may not represent complied with, ATF is listing the name industry use and consumer acceptance the full range of Primitivo cultivars. Melon de Bourgogne as the prime name of the product, has acquired a particular Furthermore, she commented that for this grape variety in the list of prime meaning. We agree that certain uses of Primitivo may be a generic term which names in § 4.91. Melon is listed as a the term Fume´ have potential to be actually includes more than one grape synonym which may also be used for confusing to consumers. Specifically, cultivar in Italy; i.e., the Italian designating domestic wines. we believe that use of the term ‘‘Fume´’’ in conjunction with another grape Primitivo may encompass grapes which ´ Sauvignon Blanc/Fume Blanc variety name containing the term are not identical to Zinfandel. Fume´ blanc and Blanc Fume´ were ‘‘blanc,’’ or with another grape variety Eagle Ridge Winery and William F. both proposed as synonyms for name to which the descriptive term Doering both commented that Primitivo Sauvignon blanc in Notice No. 581. On ‘‘blanc’’ is being used, could be and Zinfandel are the same variety but the basis of written comments, ATF confusing to consumers and possibly that Zinfandel is the name used for this concluded that Fume´ blanc was a valid misleading. Thus, ATF will not approve grape in California for more than 150 synonym for Sauvignon blanc; however, any certificates of label approval years. there was no support expressed for the (COLA’s) for a domestic wine (other Wine World Estates and the California name Blanc Fume´. Comments also than ‘‘Fume´ blanc’’) which contain both Association of Winegrape Growers indicated that ‘‘Fume´’’ is a descriptive the terms ‘‘Fume´’’ and ‘‘blanc;’’ e.g., commented that there is no conclusive term meaning smoky, and is used to COLA’s will not be approved for a wine evidence that Primitivo and Zinfandel describe the smoky or ‘‘flinty’’ flavor of designated as ‘‘Pinot blanc Fume´,’’ are the same grape. Wine World Estates Sauvignon blanc wines produced in the ‘‘Fume´ Seyval blanc,’’ and so forth. further stated that Primitivo is used in Loire region and labeled with the However, ATF is not convinced that Europe to identify a number of grape French appellation of origin ‘‘Blanc the use of ‘‘Fume´’’ in every other varieties and thus, a grape called Fume´ de Pouilly.’’ instance would be misleading or Primitivo may not be identical to Based on these comments, ATF confusing; e.g., wine designated ‘‘Fume´ Zinfandel. ATF notes that the FPMS proposed Fume´ blanc (but not Blanc Chardonnay’’ is unlikely to be confused lists Primitivo as a distinct grape variety Fume´) as a synonym for the prime name with Sauvignon blanc or Fume´ blanc. and not as a synonym for Zinfandel. Sauvignon blanc in Notice No. 749. ATF Thus, ATF will examine on a case by ATF concludes that the comments also noted that Fume´ could be used as case basis any application for a COLA support listing Primitivo and Zinfandel a descriptive term with any grape which contains a grape variety name as separate grape varieties. Although it variety name. and the term ‘‘Fume´’’ to see if the is possible that Zinfandel may be Three respondents favored listing overall name is potentially misleading. identical to some Primitivo grapes, it Fume´ blanc as a synonym for Sauvignon appears that the term Primitivo may blanc. Wine World Estates, Mondavi, Zinfandel/Primitivo represent other grape cultivars as well; and the AVA favored it because of the Notice No. 749 proposed Zinfandel consequently, the two terms cannot be widespread use of Fume´ blanc and its and Primitivo as separate grape varieties used interchangeably. Thus, Primitivo recognition by industry and consumers in § 4.91. Primitivo, an Italian grape, and Zinfandel are listed as prime grape as a synonym for Sauvignon blanc. was added to the list of prime names at names in § 4.91 and are not listed as Based on these favorable comments, the request of Cypress Valley Winery, a synonyms for each other. 526 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations

Cabernet/Cabernet Sauvignon In the interest of providing accurate ATF finds few wines are designated ATF Ruling 74–25, 1974 ATF C.B. 48, grape variety identification, ATF is not with either name although this grape permits the labeling of wine as listing ‘‘Cabernet’’ as a synonym for has been extensively used in producing ‘‘Cabernet’’ if 75 percent of its volume Cabernet Sauvignon. However, due to non-varietal wines and blends. (51 percent prior to January 1, 1983) is its past use, ATF is listing ‘‘Cabernet’’ However, we note that the purpose of derived from Cabernet Sauvignon as an alternative name in § 4.92(b) for the list of grape names in § 4.91 is to grapes. This ruling was intended to use until January 1, 1999. Concurrently, provide accurate identification of grape prevent consumer deception through ATF Ruling 74–25 is declared obsolete varieties used in producing wine. The the use of less expensive grapes such as as of the effective date of this final rule. listing of a grape name there does not denote ‘‘quality’’; it merely reflects Ruby Cabernet in a wine labeled Durif/Petite Sirah recognition of the grape variety name. ‘‘Cabernet.’’ Notice No. 581 proposed to make this These names were proposed as Since ATF finds that both names are ruling obsolete which would preclude synonyms in Notice No. 749. Three equally valid for this grape variety, both Thompson Seedless and Sultanina are the labeling of Cabernet Sauvignon or respondents commented on this listed as prime grape names and as any other wine as ‘‘Cabernet.’’ Notice proposal. synonyms. No. 749 proposed listing ‘‘Cabernet’’ as The OIV commented that the a synonym for Cabernet Sauvignon. officially recognized OIV name for this Pinot Gris/Pinot Grigio grape is Durif, and not Petite Sirah. Five respondents commented. World ATF proposed Pinot gris as a prime Wide Estates supported the proposal to Wine World Estates concurred with the proposal to list ‘‘Duriff’’ as a synonym name in § 4.91 and Rula¨nder as an permit ‘‘Cabernet’’ to be used as a alternative name in § 4.91 be phased out synonym for Cabernet Sauvignon. The for Petite Sirah unless evidence is presented to the contrary. by 1996. Pinot Grigio was not proposed OIV noted that ‘‘Cabernet’’ does not in either section. correspond to the actual grape variety Carole P. Meredith, the University of Long Vineyards and Martin Brothers name, and the name ‘‘Cabernet’’ is not California, Agricultural Experiment Winery both requested that Pinot Grigio specific as to the actual grape variety it Station at Davis, stated that the be listed as a synonym for Pinot gris. indicates. University’s examination of Petite Sirah Long Vineyards stated they are Eagle Ridge Winery and Brown- and Durif holdings show their Petite disadvantaged when selling their Pinot Forman objected to listing ‘‘Cabernet’’ as Sirah vines to be two or more different gris versus Italian wines labeled as Pinot a synonym. Eagle Ridge stated that other grape varieties. Furthermore, the Grigio. Furthermore, they stated that variety names contain the word Experimental Station’s recent DNA due to worldwide sales of the Italian Cabernet and it is incorrect to assume research shows that the grape called wine, consumers are more familiar with that the label term ‘‘Cabernet’’ by itself Petite Sirah and the Durif grape have the varietal designation Pinot Grigio would not confuse consumers. Brown- different DNA ‘‘fingerprints,’’ and are than they are with the name Pinot gris Forman commented that permitting therefore probably different cultivars or Rula¨nder. Martin Brothers also cited ‘‘Cabernet’’ to stand only for Cabernet rather than the same grape. the popularity of Italian Pinot Grigio Sauvignon is prejudicial to producers of Consequently, ATF is listing both Durif wines in requesting this name be made other varieties such as Cabernet Franc or and Petite Sirah as prime names in a synonym for Pinot gris. Cabernet Pfeiffer. They stated that there § 4.91 and not as synonyms. We will Based on the evidence that some is absolutely no consumer confusion if continue to seek evidence regarding the United States wineries are labeling their each of the three Cabernet grapes is true identity of the grape called Petite Pinot gris as Pinot Grigio, and the fact labeled with its full name. Sirah. that this term has gained consumer Cain Cellars commented that ATF has Thompson Seedless/Sultanina acceptance due to the large number of permitted the term ‘‘Cabernet’’ to Italian Pinot Grigio imported into the include Cabernet Franc, but offered no This grape variety is one of two the United States, ATF is listing Pinot evidence of such use. They further Committee recognized as having Grigio as a synonym for the prime name suggested that this term should be synonyms which could be equally Pinot gris in § 4.91. ATF notes that this permitted to refer to the entire family of accepted as the prime name. grape is known by many names Cabernet varieties including Cabernet Consequently ATF proposed the use of throughout winegrowing regions of the Sauvignon, Cabernet Franc, Merlot, both names as prime names, with either world, but that Pinot gris and Pinot Malbec, and Petit Verdot. Accordingly, name permitted without qualification. Grigio appears to be the most commonly ‘‘Cabernet’’ would become a designation In doing so, ATF noted that neither used names for this grape in the United of varietal significance to include any of name is commonly used in wine States. these grape varieties. labeling although Thompson Seedless is ATF agrees with the respondents who well known to consumers as a table Colombard/French Colombard oppose use of ‘‘Cabernet’’ as a synonym grape. On the basis of strong support for for Cabernet Sauvignon. As noted by the Brown-Forman commented these continued use of the name French OIV, ‘‘Cabernet’’ does not correspond to names should not be used Colombard, this name was proposed in an actual grape variety name, nor is this interchangeably. They argued that Notice No. 749 as a synonym for the term specific as to the grape variety to Thompson Seedless is an inferior grape prime name Colombard. which it refers. While ‘‘Cabernet’’ has which makes poor quality wine, and Three respondents commented on the been used for some years to label that use of the name Sultanina would use of French Colombard as a synonym. Cabernet Sauvignon wines, other mislead consumers. The EC commented Wine World Estates supported the ‘‘Cabernet’’ grapes exist, and consumers that Sultanina is used for table grapes proposal to list it as a synonym. William could be confused as the actual grape and raisins, but rarely used in wine F. Doering supported this proposal variety intended. Conversely, there can production. They argued that its use for because of the economic and marketing be no consumer confusion as to the designating wine would be misleading importance of French Colombard. Eagle grape variety if the actual variety name and that ATF should phase out use of Ridge Winery commented that appears on the label. this name. consumers would not be misled if the Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 527 word ‘‘French’’ was deleted as part of they are indeed the same grape variety. grape is the Tempranillo, a Vitis vinifera the name. Consequently, ATF is listing them as native to Spain and used in producing Based on historical usage and synonyms in the list of prime grape Rioja wines. While well known and consumer recognition of this term, ATF names in § 4.91. Due to the long- cultivated in Spain, Portugal, France, is listing French Colombard as a standing use of both names, their and Argentina as Tempranillo, this synonym for the prime name consumer recognition, and the grape is known as Valdepen˜ as only in Colombard, provided that an impossible task of ascribing ‘‘one prime California. ATF notes that the FAMS appellation of origin appears in direct name’’ to this grape, each name is listed listing of registered grape selections conjunction with French Colombard, in alphabetically in this section with the shows Tempranillo as a synonym for strict compliance with the requirement other name following in parentheses as Valdepen˜ as. of § 4.34(b). a synonym. In the interest of correctly identifying Mourve`dre/Mataro ATF notes that other synonyms exist grape varieties, ATF is listing for this grape variety and that Norton Tempranillo as the prime name of this ` ATF proposed the name Mourvedre as Seedling and Virginia Seedling are grape variety in § 4.91. Valdepen˜ as is a synonym for Mataro due to use of this listed as alternative names for Norton in listed as a synonym for Tempranillo in name in labeling domestic wines. Wine § 4.92. this section. ATF will give future World Estates supported this proposal consideration to phasing out the name while EC commented that Mataro is a Vignoles/Ravat 51 Valdepen˜ as. geographic name in Spain and should ATF proposed Vignoles as a synonym be phased out in favor of Monstrell. for the prime name Ravat 51 in Notice Miscellaneous Synonyms ATF finds that ampelographers such No. 749. Bruce Reisch, Cornell Lemberger was proposed as an as Galet list Mataro and Mourve`dre as University Department of Horticultural alternative spelling for Limberger in synonyms. It is difficult to establish one Science at Geneva, and William F. proposed § 4.91. William F. Doering prime name since these different names Doering supported this proposal, and it noted that the name Lemberger has reflect the Spanish and the French name is adopted. long-recognized viticultural and for this grape. However, ATF finds that ATF notes that Ravat 51 is the prime commercial usage, and he concurred Mourve`dre enjoys greater use in labeling name for this grape but that other with the proposal to list it as a spelling wine in the United States. For this numbered Ravat hybrids exist. variation for the prime name Limberger. reason, ATF is listing Mourve`dre as the Consequently, ATF will not approve Because of its commercial use in the prime name in § 4.91. As stated in labels showing only ‘‘Ravat’’ as the United States, ATF is listing Lemberger Notice No. 749, ATF does not believe grape variety; labels must specify the as a synonym for the prime grape name there is any reason to deny use of a Ravat hybrid number or use an Limberger. grape variety name to United States approved synonym. winemakers simply because that name Eagle Ridge Winery commented that bears a resemblance to a foreign name Campbell Early/Island Belle Green Hungarian is actually Sylvaner, of geographic significance. Thus, Mataro Island Belle was proposed as an and that the term Green Hungarian is is retained as a synonym for the grape alternative grape name to be phased out not used except by a few domestic variety Mourve`dre in § 4.91, provided by 1996 in favor of the prime name producers. No evidence was submitted that when Mataro is used to indicate the Campbell Early. While no comments in support of this comment. grape variety, an appellation of origin were submitted regarding the use of While the origin or identification of appears in direct conjunction with either name, ATF has received Green Hungarian remains uncertain, Mataro in strict compliance with the additional information concerning this ATF has no information which supports requirements of § 4.34(b). grape. The Island Belle grape was Eagle Ridge Winery’s comment that developed about 1898 by Adam Eckert Green Hungarian is actually Sylvaner; Cynthiana/Norton in western Washington State. This grape therefore, this comment is not adopted. Bruce Reisch, Cornell University is believed to be either a clone of The OIV commented that several Department of Horticultural Science at Campbell Early or a hybrid derived from prime names in § 4.91 are not the Geneva, submitted evidence that these a Concord. The Island Belle grape is official OIV names. Names identified by grapes are the same variety. Reisch currently used in winemaking in the OIV include Black Malvoisie which indicated that his examination of Washington State and the wine enjoys a they list as Cinsaut, Burger which they cultivars of Cynthiana and Norton vines, degree of consumer recognition. list as Monbadon, and Charbono which taken from wineries and nursery stock Due to the current use of the name they list as Corbeau. in Arkansas and Missouri, revealed Island Belle in winemaking, and the fact ATF acknowledges that although them to be identical based on isozyme that the true identity of this grape is these grapes are known by the names and ampelographic characteristics. He uncertain, ATF is retaining the name by suggested by the OIV, the names further stated that these grapes are of listing Island Belle as a synonym for the proposed in § 4.91 are more commonly Vitis aestivalis ancestry, but that vines prime name Campbell Early in § 4.91. employed in winemaking in the United were introduced using different names ATF would take action to list Island States. Therefore, ATF is not changing in Virginia and Arkansas in the last Belle as a prime name in this section these names as requested. In the case of century. Reisch also cited an 1891 should future research indicate that it is Black Malvoisie and Cinsaut, both are report to the Missouri State a distinct variety rather than a clone of listed in § 4.91, with Cinsaut listed as Horticultural Society indicating that Campbell Early. the prime name and Black Malvoisie as these varieties were actually the same a synonym. grape. ATF notes that horticulturists Valdepen˜ as and Tempranillo Wine World Estates commented have debated this question for more Valdepen˜ as was proposed as a prime favorably on the proposed listing of than a century. name in § 4.91. While there were no Gewu¨ rztraminer and Traminer as Based on Reisch’s comment and the comments addressed to this name in separate prime names in § 4.91. Eagle evidence contained in the isozyme of response to Notice No. 749, ATF has Ridge Winery commented that these two cultivars, ATF concludes that received information indicating that this Gewu¨ rztraminer is a spicy version of 528 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations

Traminer and that only Gewu¨ rztraminer some older European grape varieties intent to standardize grape variety should be listed. which were known by local or regional names. NABI favored the original Evidence is mixed on whether names, and which have received a proposal to permit alternative names to Gewu¨ rztraminer and Traminer are degree of consumer acceptance. The be used only in conjunction with the distinct grape varieties. The FPMS lists Committee noted that these alternative prime name on the label, and favored them as separate registered grape names, due to regulatory precedent and phasing out these alternative names selections while the OIV lists these commercial history, should be the after a period of time. names as synonyms. Because the exception to the general finding that, We are adopting the list of alternative evidence is inconclusive, ATF is listing whenever possible, synonyms should be names proposed at § 4.92. While ATF each as a prime name in § 4.91 and not eliminated in the shortest practical time. wishes to reduce the number of as synonyms for the same grape. No time period was given for phasing alternative names and synonyms, we Eagle Ridge Winery commented that out these synonyms. find it is impossible to phase out use of Kleinberger is actually Ebling and is The Committee report also noted that these names immediately. Many of them known by that name in Germany. ATF some grape varieties are misnamed or have been used for decades in labeling concurs with this comment but finds incorrectly identified, but that these wines and consumers are familiar with that this grape is well known by the names have received a degree of them. Wineries have large investments name Kleinberger as well as by other consumer acceptance. In order to in labels, packaging material, and synonyms. In view of the limited use of prevent economic hardship to growers advertising which utilize these names. the name Ebling in the United States, and winemakers, the Committee Wineries also have substantial ATF is not authorizing it as a synonym recommended these names be phased ‘‘goodwill’’ associated with some of for this Kleinberger. out over a five-year period. This second these variety names. list contained 52 alternative names. With respect to Wine World Estate’s Orther Synonyms comment that the January 1, 1996, date Notice No. 581 ATF received no comments regarding is too short a transition period, ATF the following prime names and ATF proposed two lists of alternative notes that it first proposed phasing out synonyms proposed in § 4.91: Muscat grape variety names, one containing most of these names in Notice No 581, Hamburg/Black Muscat; Meunier/Pinot names to be used only in conjunction published in 1986. That proposal would Meunier; Rkatziteli/Rkatsiteli; Seyval/ with the prime name and one have terminated use of most of these Seyval blanc; Shiraz/Syrah; Ugni blanc/ containing names to be phased out at a names within five years. We believe that Trebbiano. Therefore, these names are future date. Respondents submitted the wine industry has been given ample adopted as prime names and synonyms. many written comments on this issue, notice that these names would be and as a result, ATF modified this phased out. However, because of the Prime Names and Synonyms proposal. delay in publishing this final rule, ATF ATF has reorganized § 4.91 by listing Notice No. 749 is adopting January 1, 1997 as the only one prime name for each grape termination date for all names proposed variety. ATF has drawn the distinction In this notice ATF proposed only one for inclusion in § 4.92(a) by Notice No. between prime names and synonyms list of alternative names. ATF proposed 749. primarily on the basis of the final phasing out these 54 names, appearing In this final rule, ATF is adding new Committee report but with some at § 4.92, as of January 1, 1996. Other names to the list of alternative names. exceptions Synonyms and authorized names were removed from the list of In order to provide an adequate spelling variants appear in parentheses alternative names and proposed as transition period for phasing out these following the prime name, but have no synonyms to prime names in § 4.91; i.e., new names, ATF is permitting their use separate alphabetical listing except in they could stand alone on a label as a until January 1, 1999. the case of Thompson Seedless and designation and would not be phased out in the future. Specific Comments on Alternative Sultanina, and Cynthiana and Norton. Names In the Case of the Riesling grape, General Comments on Alternative Several respondents commented that Riesling is listed as the prime name and Names White Riesling appears as a synonym. specific alternative names be made ATF received only three comments Synonyms and spelling variants may be synonyms for prime grape names in addressing the issue of permitting used, standing alone, as the designation order to prevent them from being alternative names. William F. Doering of a wine. phased out. concurred with the proposal for a single Alternative Names for Grape Varieties, list of alternative names to be phased Gutedel § 4.92 out in the future. Wine World Estates Gutedel was proposed as an agreed with the concept to phase out alternative name for Chasselas Dore´. Background these alternative names over time, but Eagle Ridge Winery commented that The final Committee report due to the economic consequences, Gutedel is the correct name in its acknowledged that many grape varieties stated that the proposed date of January homeland of Germany, that Chasselas are known by more than one name, 1, 1996, did not allow a long enough Dore´ is not as commonly used, and some by several names. As part of its transition period. requested that Gutedel be listed as a deliberations, the Committee selected a NABI opposed the proposal. They synonym in § 4.91. preferred ‘‘prime name’’ for each variety supported the Committee According to the OIV listing of grape and considered alternative names and recommendation to eliminate synonyms variety names, Gutedel is the name synonyms. It then recommended two in labeling and to use only the prime commonly used in Germany and lists of alternatives names. The first name as a designation. NABI stated that Switzerland, while Chasselas Dore´ is contained synonyms which, if used on permitting alternative names would lead listed as the primary name in Canada, a label, would be required to appear in to consumer confusion due to the large Chile, France, Romania, and Italy direct conjunction with the prime name. number of synonyms and alternative (Chasselas Dorato). The FPMS lists These alternative names referred to names, and would be contrary to ATF’s Chasselas Dore´ but not Gutedel as a Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 529 registered grape selection, while the Refosco recommendations regarding the use of State of Oregon authorizes Chasselas Refosco was proposed as an other grape variety names which Dore´ as the only varietal designation for alternative name for Mondeuse. Four incorporate the term Riesling. wine made from this grape. respondents requested that Refosco be Riesling as a Prime Name made the prime name of this grape. Based on this evidence, ATF finds ATF proposed White Riesling and ´ Lockwood, a California company which that the name Chasselas Dore is more Johannisberg Riesling as prime names in produces a varietal Refosco wine, stated commonly used in the United States. Notice Nos. 581 and 749, but did not that this wine is nationally recognized Thus, ATF is not adopting this comment propose to permit use of the name as Refosco, and that to eliminate this to list Gutedel as a synonym for Riesling. Notice No. 749 stated that this name would cause them economic Chasselas Dore´. Gutedel remains listed proposal was intended to create a clear hardship. Wine Institute noted that the in § 4.92(a) as an alternative name to be distinction between those grapes which California grape crush report uses phased out by January 1, 1997. in the past were labeled as ‘‘Riesling’’ Refosco and Mondeuse as synonyms. but which were not the true Riesling Pineau de la Loire They further stated that several wineries grape and the true White Riseling grape. are releasing a varietal Refosco wine and This name was proposed as an Accordingly, the term ‘‘Riesling’’ would that consumers understand this term. alternative name for Chenin blanc. no longer be used to label grapes made San Lucas Vineyards stated they have Three respondents, the Embassy of from Emerald Riesling or other so-called sold Refosco grapes for years to several France, Brown-Forman and Wine World Riesling grapes. wineries. They also cited Refosco as a ATF received comments from 19 Estates, supported this proposal citing more pleasant and marketable name the fact that a grape should not contain respondents regarding Riesling issues. than Mondeuse. Wine World Estates Sixteen of them favored permitting the a ‘‘Pinot’’ or ‘‘Pineau’’ designation noted that the FPMS lists Refosco rather unless it is a true Pinot grape. Since term ‘‘Riesling’’ (with or without than Mondeuse as the name of their synonyms) as a prime name, or as a type Chenin blanc is not a true Pinot grape, registered grape selections. ATF is continuing to list Pineau de la designation of varietal significance. The difference between these names Thirteen respondents stated that Loire as an alternative name in § 4.92(a) is attributable to place of cultivation, to be phased out as of January 1, 1997. Riesling is the true name of this grape, with Refosco being the Italian name and and that ATF should not prohibit Pinot Chardonnay Mondeuse being the French name for American winemakers from using it to this grape. ATF finds no prejudice label their wines. Respondents This name was proposed as an toward use of either name, and both supported this position by stating that it alternative name for Chardonnay. have received a degree of consumer is unacceptable for the United States to William F. Doering and Wine World recognition in the United States. ATF is, deny American winemakers use of the Estates both supported this proposal therefore, adopting these comments by accepted world-wide name for the because this grape is not a true Pinot listing Refosco as a synonym for Riesling grape and cited the fact that grape. ATF continues to list Pinot Mondeuse in § 4.91. German wines are labeled simply Chardonnay as an alternative name in Other Alternative Names Riesling. The Federal Republic of § 4.92(a) to be phased out by January 1, Germany commented that consumers 1997. Other names proposed in § 4.92 are would be confused or misled if other retained as alternative names except as names are used to designate a Riesling Muscadelle noted above. Names appearing at wine. The Oregon Winegrowers § 4.92(a) may be used for wine Association commented that without Notice No. 749 listed Muscadelle as designations until January 1, 1997. See an alternative name for the prime grape use of the term Riesling, U.S. also the preamble discussion of names winemakers would be at a competitive name Sauvignon vert. In their comment, similar to appellations of origin for the OIV noted that the official OIV disadvantage against German wines. comments on Saint Emilion, and the Amity Vineyards stated that consumers recognized name for this grape is preamble section entitled ‘‘Riesling Muscadelle. Wine Institute commented might think that German Riesling is a issues’’ for a discussion of Franken wine different from an American that California uses Muscadelle as the Riesling. prime name for this grape in its annual Riesling. The increasing acceptance of grape crush report. Riesling Issues American wines in the international wine community was cited by H. Sichel The FPMS lists both Sauvignon vert Background So¨hne as an important reason to allow and Muscadelle (du Bordelais) as The final report of the Winegrape the designation Riesling to be used on registered grape selections while Oregon Varietal Names Advisory Committee American wines. only permits Muscadelle to be used for focused extensively on Riesling issues. The Washington Wine Commission varietal labeling of this wine. It noted that Johannisberg Riesling has stated that consumers identify strongly Furthermore, examination of wine long been recognized as an American with the Riesling name and that literature indicates that the grape which term in order to distinguish the White wineries have worked hard to cultivate is called Sauvignon vert in California is Riesling from other grape varieties a positive image for Riesling among actually the Muscadelle grape. which are not true Rieslings. The consumers. Moreover, the prohibition of Based on this evidence and the Committee recommended that White Riesling as a prime name would exclude comments received on this issue, ATF is Riesling and Johannisberg Riesling be the ability to market a ‘‘Dry Riesling’’ or listing Muscadelle as the prime name permitted as equal synonyms for this ‘‘Blush Riesling’’ wine, a position also for this grape in § 4.91. Concurrently, grape. Furthermore, it recommended endorsed by Stimson Lane, and by the we are removing Sauvignon vert from that the term Riesling not be permitted Oregon Winegrowers Association. This that list and according it alternative to stand alone as the name of an association cited Oregon law which name status. It is added to the new American grape variety, but gave no prohibits use of Johannisberg Riesling listing of names in § 4.92(b) which may explanation for this position. The final on a wine label, thus requiring Oregon be used until January 1, 1999. Committee report made wineries to market either a Riesling or 530 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations

White Riesling wine. They stated that wines composed of a number of so- for American Riesling wine. H. Sichel denial of the ability to market a Riesling called Riesling grapes. This would be a So¨hne favored retaining White Riesling wine would cause Oregon wineries misleading use of the name since as an alternative name. NABI supported severe economic hardship. Other Riesling is accepted world-wide, as well Riesling as the prime name but favored respondents favoring listing Riesling as as within the United States, as permitting White Riesling as an a prime name included the EC, the OIV, representing a specific, identified grape alternative. Brown-Forman supported the DW, NABI, the AVA, Eagle Ridge variety. Due to the enormous the proposal to list White Riesling and Winery, and Umpqua Valley Chapter, preponderance of wines labeled Riesling Johannisberg Riesling as prime names, Oregon Winegrowers Association. and made from the White Riesling and to prohibit the term Riesling from Three respondents including Wine grape, ATF believes it would be standing alone. Wine World Estates Institute, Heublein, and Wine World deceptive to permit wines made from commented in favor of permitting both Estates favored listing Riesling in § 4.28 Emerald Riesling, Grey Riesling, or White Riesling and Johannisberg as a type designation of varietal other so-called Riesling grapes to be Riesling as synonyms. significance rather than as a grape labeled simply ‘‘Riesling.’’ Thus, ATF is variety name. According to Wine not adopting the comment to list Conclusion Institute, ATF has permitted Riesling as a type designation of varietal winemakers to use the term ‘‘Riesling’’ significance, and is instead listing ATF finds the term White Riesling is to designate a wine which derives 75 Riesling as a grape variety name. well known to consumers. This term is percent of its volume from any Riesling is added to the list of prime used internationally as a designation for combination of White Riesling or grape names in § 4.91. As of the this wine. White Riesling is also the Emerald Riesling grapes. They stated effective date of this final rule, any botanical name of this grape (a that consumers have come to associate American wine labeled ‘‘Riesling’’ must translation of ‘‘Weisser Riesling’’). ATF the term Riesling as a descriptive term be made from a minimum of 75 percent is, therefore, listing White Riesling as a used by a specific producer rather than Riesling (White Riesling) grapes. Wines synonym for Riesling in § 4.91. as a specific varietal designation. Thus, now made from Emerald Riesling or Although the term Johannisberg Wine Institute argued that Riesling other so-called Riesling grapes will need Riesling has long been used in the should be a general term which shows to be relabeled to show the actual grape United States to distinguish true [White] merely use of various Riesling grapes varieties used. Riesling wine from wine made with rather than designating the White Discussion of White Riesling and other so-called Riesling grapes, the Riesling grape. They further commented Johannisberg Riesling evidence is clear that Johannisberg that to eliminate this practice would Riesling is not the correct name of this require wineries to label wines with the The Winegrape Varietal Names grape variety. Moreover, as noted by actual percentage of various grape Advisory Committee recognized White varieties, action which would be costly Riesling (the literal translation of several respondents, ‘‘Johannisberg’’ is a and would confuse consumers. Wine ‘‘Weisser Riesling,’’ the botanical name German geographic term, and the name World Estates and Heublein supported of the grape) as the prime grape name. of a specific winegrowing region within making Riesling a type designation of The Committee also recommended Germany. varietal significance, similar to the listing Johannisberg Riesling as a Since this final rule authorizes use of proposed designations for Muscatel, synonym since they found this name the name Riesling, standing by itself, as Muscadine, and Scuppernong. had been in use for many years in the the prime name for wine made from this Brown-Forman supported the United States, and that it was used to grape, ATF finds that there is no longer proposal to list White Riesling and distinguish the White Riesling grape the necessity to distinguish wine made Johannisberg Riesling as prime names, from other so-called Riesling grapes. from the true Riesling grape by use of and to prohibit the term ‘‘Riesling’’ from Many comments addressed the listing of the term ‘‘Johannisberg Riesling.’’ Based standing alone. The Verband Deutscher both names in § 4.91. on this fact, and in the interest of Weinexporteure and the Deutscher Many respondents objected to implementing the Committee’s charter Weinbauverband commented that White permitting ‘‘Johannisberg Riesling’’ as a to provide accurate and correct grape Riesling should be the only designation synonym for the Riesling grape. variety names, ATF has concluded that for American Riesling wine, and that Respondents stated that ‘‘Johannisberg’’ the name Johannisberg Riesling should Riesling should not be used as a prime is a geographic term and a registered no longer be permitted as a grape variety name for American wines. trademark; thus, under German law, designation. Accordingly, Johannisberg only wine from Schloss Johannisberg in Conclusion Riesling is removed as a synonym for Germany is entitled to the designation Riesling in § 4.92 and made an All comments clearly indicate that the Johannisberg Riesling. alternative name. Owing to its current worldwide name for this grape is ATF received fewer comments use and the necessity to prepare new Riesling. ATF particularly notes two addressed to use of White Riesling as a packaging and marketing materials, quotations from the Statement of synonym. The DW commented that Johannisberg Riesling is listed in Principles in the Committee report: while this is the scientific term, White § 4.92(b) which permits its use in ‘‘Accuracy has been the Committee’s Riesling is never used to label German primary objective’’ and ‘‘the key wines. The Oregon Winegrowers labeling wines prior to January 1, 1999. question has in every case been ‘What Association commented in favor of Other Riesling Names is correct?’ ’’ On the basis of all allowing Riesling as the prime name, evidence, ATF finds no valid reason to but noted that the State of Oregon Several other grape variety names exclude Riesling from the list of prime permits either Riesling or White contain the word ‘‘Riesling,’’ but are not names in § 4.91. Riesling to be used in labeling. the true Riesling grape. Grey Riesling, ATF rejects the position advanced by The Verband Deutscher Emerald Riesling, Missouri Riesling, three respondents to make Riesling a Weinexporteure and the Deutscher and Wa¨lschriesling (and synonym type designation of varietal significance, Weinbauverband favored authorizing Welschriesling) were proposed as prime and thus permit its use for designating White Riesling as the only designation names in Notice Nos. 581 and 749. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 531

General Comments European grape variety name with no This grape was developed by consumer recognition. Professor H. P. Olmo at the University Fourteen respondents favored the ATF finds the evidence for removal of of California, Davis in 1948, and is removal of these Riesling names from Grey Riesling from the list of prime identified as ‘‘Emerald Riesling (Olmo the list of prime names. The consensus names to be very strong. This grape is 1948).’’ It is a cross between the Riesling was that none of these grape varieties not related to the Riesling, but has been grape and Muscadelle (Sauvignon vert). are the true Riesling grape, and that any positively identified as Trousseau gris. Eight respondents commented on this use of a Riesling name to identify non- The FPMS lists ‘‘Trousseau’’ as a proposal. Seven noted that Emerald Riesling grapes is misleading and synonym for Grey Riesling. Moreover, as Riesling is not a true Riesling grape and confuses the public. The Oregon noted by the Oregon Winegrowers this name should be listed as an Winegrowers Association noted that Association, the use of the name Grey alternative name and phased out in the United States wineries’ varietal labeling Riesling for labeling varietal wines is future. These respondents suggested of these misnamed ‘‘Riesling’’ varieties declining. ATF is, therefore, removing that this grape be named ‘‘Olmo’’ in is declining. All of these respondents Grey Riesling from the list of prime honor of its developer, ‘‘Emerald’’ or requested that ATF take action to phase names in § 4.91, and is listing Trousseau ‘‘Emerald Grape,’’ or be given a new out the use of Grey Riesling, Emerald gris as the prime grape name. In order commercial name. Wine World Estates Riesling, Missouri Riesling, and to give American wineries sufficient supported retaining Emerald Riesling as Wa¨lschriesling over a period of time. time to make the name change to a prime grape name. Grey Riesling/Trousseau Gris Trousseau gris, ATF is listing Grey ATF is listing Emerald Riesling as a Riesling as an alternative name in prime grape name for two reasons. First, The final Committee report stated that § 4.92(b) which may be used until there is no other known name which the Grey Riesling grape had not been January 1, 1999. has been used; it is known to industry conclusively identified but that it was Missouri Riesling and consumers only as Emerald not a true Riesling. It recommended that Riesling. ATF also retains this name This grape has been cultivated in the ATF replace the incorrect name Grey because, unlike other misnamed United States for over a century, always Riesling with the correct grape variety Riesling varieties, this grape is directly as Missouri Riesling. It is not a Riesling, name when positive ampelographic related to the Riesling. Thus, ATF is but is a native American grape, probably identification of this grape was made. listing Emerald Riesling as a prime a cross of Vitis ripara and Vitis labrusca. Grey Riesling was proposed as the name for this grape in § 4.91. prime name in Notice No. 581 since no Historical evidence indicates this grape definitive identification of this grape was developed by Nicholas Grein in Wa¨ lschriesling and Welschriesling Hermann, Missouri in 1870. Due to the had been made. However, when Notice On the basis of the final Committee lack of any alternative name, the No. 749 was published in September report, both names were proposed as Committee report recommended 1992, this grape had been identified as prime names and synonyms in Notices Missouri Riesling be included in the list Trousseau gris which was proposed as Nos. 581 and 749. of prime names. It was proposed as a a synonym for Grey Riesling. Nine respondents commented on this. The Federal Republic of Germany prime name in Notice Nos. 581 and 749. ATF received eight comments Eight agreed that this grape is not a true comment confirmed this ampelographic addressing Missouri Riesling. All Riesling, and that the prime name finding. Their comment stated that respondents requested that since it is should be changed. The German Federal findings of the German Federal Institute not a true Riesling, and because it Republic noted that the naming of this for Cultivation Research in Vintage contains a place name, ATF remove it grape is primarily a European problem Culture and Horticulture, Institute for from the list of prime grape names. since it is widely cultivated in Grapevine Breeding Geilweilerhof, Respondents suggested that the name be Southeastern Europe under various supports the recent ampelographic replaced either with ‘‘Grein’’ or ‘‘Grein names including ‘‘Laski Rizling,’’ study showing Grey Riesling to be the Grape’’ in honor of Nicholas Grein who ‘‘Olasz Rizling,’’ ‘‘Rakusky Rizling,’’ and variety Trousseau gris. developed the grape, or with ‘‘Missouri ‘‘Rizling Vlassky.’’ One respondent Twelve respondents commented that Grape,’’ and that Missouri Riesling be suggested that the name should be ATF should phase out the name Grey listed as an alternative name for a short standardized as Welschriesling while Riesling in favor of the correct name period of time. five others suggested using the Trousseau gris. Respondents included ATF acknowledges that the Missouri European name Welsch Rizling. both European and international Riesling is not a true Riesling grape. ATF is not aware that this grape has interests, one Committee member, and Nevertheless, it has been used as a wine been used in the United States to make American wineries and grape growers. designation for a long period of time. a varietal wine designated as Only one respondent, Wine World Since there is no evidence which Wa¨lschriesling or Welschriesling; thus Estates, commented in favor of retaining indicates that this grape has any other consumers are unfamiliar with either Grey Riesling as a prime name, although known name, ATF is retaining the name. ATF is thus adopting the as a synonym for Trousseau gris. ATF prime name Missouri Riesling in § 4.91. suggestion to use the name for this grape notes that five respondents favored commonly used in Europe, Welsch retaining Grey Riesling as a prime name Emerald Riesling Rizling. We believe this action will help in their comments to Notice No. 581, The Committee report noted that this avoid consumer confusion since prior to positive identification of the grape is widely planted, but that it is a consumers will be unlikely to confuse grape. Reasons advanced at that time crossbred variety and not the true wine labeled Welsch Rizling with wine included the fact that this variety had Riesling grape. In the absence of an made from the White Riesling grape. been grown in California for over 100 accepted alternative name, the Thus, ATF is listing Welsch Rizling as years and had received wide public Committee recommended its continued a prime name in § 4.91. Wa¨lschriesling acceptance as Grey Riesling. Other use as a prime name. Emerald Riesling and Welschriesling are listed in § 4.92(a) respondents noted that the name Grey was proposed as a prime name in Notice as alternative names to be phased out by Riesling was preferable to an unknown Nos. 581 and 749. January 1, 1997. This short phase out 532 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations period is provided due to lack of use of Estates and the California Association of notice stated that ATF had insufficient either name at the present time. Winegrape Growers commented that information either to propose Napa Gamay should be retained as a eliminating use of the term Gamay Other Riesling Names synonym for Valdiguie´ due to its Beaujolais or to authorize its continued The final Committee report noted that historical use and consumer use on a permanent basis. a few other grape varieties include the recognition. The Embassy of France and Wine World Estates favored the name Riesling. Since none of these are the INAO favored the phase out of Napa decision to defer action on use of the the true Riesling grape, it recommended Gamay as a prime name in favor of the term Gamay Beaujolais. The California these other names be eliminated, and correct name Valdiguie´. The OIV Association of Winegrape Growers specified Okanagon Riesling and commented in favor of phasing out the supported ATF’s current policy to Siegfried Riesling as misleading names term Napa Gamay in order to remove a permit wine to be designated Gamay for grapes which are not Rieslings. ATF geographic term from a grape variety Beaujolais if it is derived from not less notes that Siegfried Riesling was name. Amity Vineyards pointed out that than 75 percent Pinot noir or Valdiguie´ released in 1958 under the name the Napa Gamay grape is unrelated to (Napa Gamay) grapes. Several other Siegfried which is included in the list Gamay noir, and thus, ‘‘imposters’’ gain respondents requested that ATF specify of prime grape names. We are not aware a marketing advantage over persons a date by which use of the term Gamay of any other name by which Okanagon selling true varietal Gamay noir wine. Beaujolais would be phased out in favor Riesling has been called. Based on the comments and the of labeling these wines with the actual ATF did not propose Okanagon recent identification of this grape grape variety. These respondents Riesling, Siegfried Riesling, or any other variety, ATF has decided to phase out included the Agricultural Counselor, grape variety names which includes the the name Napa Gamay. ATF finds that Embassy of France, the Union term ‘‘Riesling’’ as a prime grape name Napa Gamay is seldom used for labeling Interprofessionnelle des Vins du in Notice Nos. 581 or 749. Franken a varietal wine; more often it is used in Beaujolais, the FEVS, the INAO, and Riesling was proposed as an alternative producing Gamay Beaujolais and other NABI. name for Sylvaner, to be phased out by non-varietal wines. Moreover, it is not a ATF has made Gamay Beaujolais the January 1, 1997. Gamay grape; thus any use of the name subject of a separate rulemaking Twelve respondents commented on ‘‘Gamay’’ for this grape is incorrect. This proceeding. See Notice No. 793, 59 FR the use of other so-called Riesling grape now has been positively identified 15878, April 5, 1994. In the interim, names. These respondents unanimously as Valdiguie´, although it is not widely ATF will permit domestic wineries to supported excluding any other Riesling known by this name. In the interests of use Gamay Beaujolais as a designation. grape names from the list of prime accuracy in labeling, ATF is adopting Such wine must derive at least 75 names in § 4.91, and supported ATF’s Valdiguie´ as the prime name in § 4.91, percent of its volume from Pinot noir, proposal to phase out Franken Riesling and Napa Gamay as an alternative name from Valdiguie´ (Napa Gamay), or from in favor of Sylvaner by January 1, 1997. in § 4.92(b) which may be used for a mixture of these grapes. These proposals are adopted. labeling wine until January 1, 1999. New Grape Variety Names Gamay Issues Gamay Noir General Napa Gamay The Committee recommended that the grape variety Gamay be included as a Five respondents requested the This grape has a long history of prime name in anticipation that wine inclusion of additional grape variety cultivation in California but its origin is from the true Gamay grape would be names to the list of prime names in unclear. During the 1960’s, the produced in the United States in the § 4.91. Two of them are newly- University of California at Davis future. Gamay was proposed as a prime developed grape varieties; others are determined that this grape was the name in Notice No. 581. On the basis of European vinifera grapes which have French Gamay grape (Gamay noir). More a comment submitted by the Oregon been introduced into viticultural use in recent ampelographic studies have Winegrowers Association, ATF the United States. In Notice No. 749, disclosed that the grape called Napa proposed Gamay noir, a shortened form ATF also solicited information on a Gamay grape is not related to the French of the name Gamay noir a` jus blanc, as number of grape varieties which were Gamay. its prime name in Notice No. 749. In not proposed as prime names. The Committee report recommended that notice, ATF stated that use of Chardonel that Napa Gamay be proposed as an Gamay noir would help distinguish alternative name to be phased out when wine made from the true Gamay grape Bruce Reisch, Department of the grape’s true identity was from other wines which were labeled Horticultural Sciences, The New York established. Notice No. 581 proposed ‘‘Gamay’’ in the past. State Agricultural Experiment Station, Napa Gamay as a prime grape name, but ATF received no comments addressed Cornell University at Geneva, requested noted that work was underway to to the name Gamay noir, and it is that Chardonel be added to the list of establish its true identity. Recent included in the list of prime grape prime names. He stated that Chardonel ampelographic study has identified this names. ATF further notes that we will is a cross between Seyval and grape as Valdiguie´, a French grape. Due no longer approve American wine labels Chardonnay first made in 1953 at to the long-standing use of the name, which show only ‘‘Gamay’’ as a Geneva. It was propagated in 1960 as ATF proposed Napa Gamay as a designation. Future labels must show ‘‘NY 45010’’ and later renamed ‘‘Geneva synonym for Valdiguie´ in Notice No. Gamay noir if produced from the true White 9.’’ The grape was named 749. ATF solicited comments on Gamay grape, or Napa Gamay if Chardonel by Cornell University in whether Napa Gamay should be produced from Valdiguie´ and bottled 1990, and has received U.S. Plant Patent retained as a synonym for Valdiguie´, or prior to January 1, 1999. No. 7860, dated May 5, 1992. whether the name Napa Gamay should According to Reisch, growers in be phased out in the future. Gamay Beaujolais Maryland, New Jersey, Pennsylvania Respondents submitted mixed ATF did not address the term Gamay and Missouri have expressed comments on this issue. Wine World Beaujolais in Notice No. 749. That satisfaction with the viticultural and Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 533 winemaking characteristics of ‘‘Roussanne,’’ ‘‘Teroldego,’’ ‘‘Tocai United States and its use in making Chardonel. Wine was first made from Friulano,’’ and ‘‘Verdelho.’’ wine, ATF is adding Freisa to the list of this grape in 1966. Currently, the grape Arneis is a white wine grape native to prime names in § 4.91. is cultivated in Pennsylvania, Michigan, Italy’s Piedmont region. According to Gros Verdot is another red wine and Arkansas, and vines are available the OIV, it has no synonyms in general variety native to Bordeaux. It is not from the New York State Fruit Testing use. ATF has granted label approval to currently listed as an FPMS registered Cooperative Association, Geneva, and at least one California winery for a grape selection although Guenoc Winery from commercial nurseries. ATF has varietal Arneis wine. Due to its stated they are growing this grape. ATF given certificates of label approval to introduction in the United States and believes that this grape will be used in wineries in several States for a use in making wine, ATF is listing producing varietal wines. Consequently, Chardonel wine. Accordingly, ATF is Arneis as a prime grape name in § 4.91. ATF is listing Gros Verdot as a prime adding Chardonel to the list of prime Carmene`re is a red wine variety grape name in § 4.91. grape names in § 4.91. native to Bordeaux. The OIV lists no Roussanne is a white wine variety synonyms in general use. It is listed as native to the Rhoˆne. The OIV lists use Golden Isles a grape variety name for use under the of the synonym ‘‘Bergeron’’ in France. R.H. Lane, Associate Professor of rules of the Oregon Liquor Commission. Roussanne is not listed as an FPMS Horticulture, the University of Georgia, Carmene`re is a Bordeaux grape which is registered grape selection, although it Agricultural Experiment Station, also used in Bordeaux-style blends has been used to produce wine in requested that Golden Isles, another produced in the United States. Due to California where plantings are as yet newly-developed grape variety, be its use in winemaking, ATF is listing limited. ATF has granted a certificate of included on the list of prime names. Carmene`re as a prime grape name in label approval to a California winery for Golden Isles is a bronze Muscadine § 4.91. their Roussanne wine. Due to its (Muscadinia rotundifolia) grape Cortese is a white wine variety grown introduction in the United States and developed at the University of Georgia in the Piedmont region of Italy. The OIV use in making wine, ATF is listing Agricultural Experiment Station, and is lists no synonyms which are in Roussanne as a prime name in § 4.91. a cross between Fry and Georgia 19–6 worldwide use. Mt. Palomar Vineyards Teroldego is a red wine variety made in 1969. According to the commented they currently grow two indigenous to Italy’s northeast Trento- literature, Golden Isles produces a high acres of Cortese in their vineyard in Alto Adige region where it is grown quality wine with less pronounced Temecula, CA, and will produce varietal almost exclusively on the Campo Muscadine flavor than other bronze wine in the future. Due to its Rotaliano plain north of Trento. The Muscadine wines. Golden Isles vines are introduction in the United States and OIV lists no synonyms in general use. commercially available. use in making wine, ATF is adding Teroldego is not listed as an FPMS ATF is adopting this comment and Cortese to the list of prime grape names registered grape selection, although adding Golden Isles to the list of prime in § 4.91. there are small plantings in the United names in § 4.91. Corvina, a red wine grape, is native to States. the Ventio region of Italy where it is a Millbrook Winery has stated that they Sereksiya common element in Bardolino and are producing a wine using Teroldego ATF requested information about the Valpolicella wines. In Italy this grape is grapes. Based on this evidence of usage, variety ‘‘Sereksia.’’ This grape, a Vitis also known as ‘‘Corvina Veronese.’’ ATF is adding Teroldego to the list of vinifera, is a native of Russia, but has Corvina Veronese is a FPMS registered prime names in § 4.91. been introduced into the United States grape selection, and is available for Tocai Friulano as its name implies is for viticultural use. commercial use in the United States. a white wine grape native to the Friuli- Bruce Reisch commented that Based on the use of this grape in Venezia Giulia region of extreme Sereksiya Chernaya is a blue grape from winemaking in the United States, ATF northwest Italy. The OIV lists several the Soviet Union. He noted that it has is listing Corvina as a prime name in synonyms including ‘‘Tokai,’’ ‘‘Tokay,’’ many old world synonyms (Bobyaska § 4.91, but without the geographic term and ‘‘Sauvignonasse.’’ Tocai Friulano is Nyagra, Cheryi Redkii, Koldaursha, ‘‘Veronese’’ which refers to the region in listed as an FPMS registered grape Sassar, Stropatyi, Tsotlyar), but that the Italy where the Corvina grape is selection and there are small plantings correct name is ‘‘Sereksiya.’’ This grape commonly grown. in the United States. At least one winery has been used by at least one New York Ferna˜ o Pires is a white grape native to has been given a certificate of label winery to make a varietal wine. Based Portugal, but also grown in South approval for a varietal Tocai Friulano on this evidence, ATF is adding Africa. It is listed as a FPMS registered wine. Sereksiya to the list of prime grape grape selection. According to Millbrook Due to its cultivation in the United names in § 4.91. Winery, a small amount of Ferna˜o Pires States and its use in winemaking, ATF has been planted in the United States. is including Tocai Friulano in the list of Other Grape Varieties ATF believes this grape variety is being prime grape names in § 4.91. Three respondents sought the used in producing wine in the United Verdelho is a white wine grape native inclusion of other grape varieties on the States, or will be used in the near future. to Portugal which is widely used in list of prime names. These varieties are Thus, ATF is listing Ferna˜o Pires as a producing Port and Maderia wines. It is Vitis vinifera grapes which have been prime grape name in § 4.91. also grown in Australia where it is used introduced into viticultural use in the Freisa is an Italian black grape. in producing table wines. Verdelho is United States in recent years and which According to the OIV, there are no listed as a registered grape selection by are now being used to make varietal synonyms in worldwide usage. Freisa is the FPMS and is commercially available wines. The Millbrook Winery, Mount listed as a FPMS registered grape at nurseries in the United States. Based Palomar Winery, and Guenoc Winery selection. Millbrook Winery commented on this evidence, ATF is adding requested inclusion of the following that a small amount of Freisa has been Verdelho to the list of prime grape vinifera varieties: ‘‘Arneis,’’ planted in at least two vineyards, and names in § 4.91. ‘‘Carmene`re,’’ ‘‘Cortese,’’ ‘‘Corvina,’’ they have produced wine from these Pinotage, a red grape variety, is a Ferna˜o Pires,’’ ‘‘Freisa,’’ ‘‘Gros Verdot,’’ grapes. Due to its availability in the cross between Pinot noir and Cinsaut. 534 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations

This grape is widely planted in South Appellation of Origin which do not contain geographic terms Africa and in recent years small Wine Grape Variety (Nation) and which they believe would be less amounts have been planted in the likely to confuse consumers. United States. It is listed as a registered Muscat Pantelleria ... Moscato di Pantelleria Discussion grape variety by the FPMS, and is (Italy). Rosette ...... Rosette (France). ATF set forth its position concerning commercially available. Pinotage is Pinot Saint George .. Saint-Georges Saint- currently used to make wine and ATF the use of grape variety names which Emilion (France). may be similar to foreign appellations of has granted certificates of label approval St. Croix ...... Ste.-Croix Du-Mont for varietal Pinotage wines. Although no (France). origin in Notice No. 749. ATF stated respondents requested the inclusion of Saint Macaire ...... Cotes de Bordeaux that there is no reason to deny use of a Pinotage in the list of prime grape Saint-Macaire grape variety name to American names, ATF is adding this grape to the (France). winemakers simply because that name list based on its current use. Tinta Madeira ...... Madeira (Portugal). bears a resemblance to a foreign name Early Muscat. Early Muscat is a ValdepenÄas ...... ValdepenÄas (Spain). of geographic significance. ATF believes Vivant ...... Romanee Saint-Vivant the requirement to use an appellation of vinifera grape grown on the west coast (France) primarily as a table grape. Although origin in direct conjunction with a grape seldom employed in winemaking, a variety name will prevent confusion These respondents objected to the between an American varietal wine and number of wineries have produced a proposal to list these as prime grape varietal Early Muscat wine over the last a wine labeled with a foreign variety names on the basis that their use appellation of origin. ATF believes this several years. The State of Oregon lists on American wine labels would: (1) be Early Muscat as a permitted grape requirement makes foreign wines confusing and misleading to consumers distinctive from American wines variety designation, and this grape is since the wines would not be produced available through commercial nurseries. bearing a grape variety name. We further in the designated areas and would not stated that any questions concerning the Although no written comments were meet the appellation of origin received regarding variety, ATF is potential for consumer confusion as to requirements; (2) comprise an erosion of the identity of wine which may arise including Early Muscat in the list of the foreign appellation of origin name; prime grape names in § 4.91 on the when a foreign geographic term is and (3) be in violation of the exchange similar or identical to a varietal name basis of its use in winemaking. of letters between the EC and United Fredonia is an older Vitis labrusca would be resolved by ATF on a case-by- States of July 26, 1983, which were case basis. grape. It has fallen out of favor in intended to prevent erosion of non- producing a varietal wine in recent ATF’s position on this matter has not generic designations of geographic changed. Thus, ATF is not removing years, but still enjoys use in significance. Several respondents winemaking. ATF notes that it has any grape variety names from the lists rejected ATF’s argument made in Notice in §§ 4.91 and 4.92 merely because they granted label approval recently to No. 749 that use of these names was not wineries producing varietal Fredonia are similar to foreign appellations of likely to result in consumer confusion origin or contain geographic terms. The wine. Although no respondents to since the grape variety name would Notice No. 749 requested its inclusion, following names proposed in § 4.91 are always appear in direct conjunction adopted: Alicante Bouschet, Aligote´, ATF is including Fredonia in the list of with an appellation of origin on a wine prime grape names in § 4.91. Carignane, Early Burgundy, Flame label. Spain commented that the Tokay, Fume´ blanc, French Colombard, Grape Variety Names Identical or authorization of three grape variety Green Hungarian, Mataro, Muscat of Similar to Appellations of Origin or names, ‘‘Alicante Bouschet,’’ Alexandria, Muscat Canelli, Naples, Foreign Geographic Terms ‘‘Carignane,’’ and ‘‘Valdepen˜ as,’’ would Rosette, St. Croix, Saint Macaire, Tinta hinder future ATF recognition of well Madeira, Valdepen˜ as, and Vivant. Backgound established appellations of origin, and Included in proposed § 4.91 were 13 would negatively impact the sale of Specific Actions grape variety names which six Spanish wines in the U.S. market. The EC, France, FEVS, and the INAO respondents identified as being similar The EC, France, and the INAO did not supported the proposal to eliminate use or identical to recognized appellations object to the use of Aligote´ as a grape of the name Saint Emilion, and to phase of origin within the European variety name provided ATF prohibited out use of the names Franken Riesling, Community. These respondents winemakers from using the terms Pineau de la Loire, and Muscat including the EC, the Embassy of Spain Aligote´ and Burgundy (a semigeneric Frontignan. (Spain), the Embassy of the Republic of designation under § 4.24(b)) together on In Notice No. 749 ATF noted that the France (France), the OIV, the FEVS, and American wine labels. These name Saint Emilion is not in INAO identified the following proposed respondents believed this labeling could widespread use in the United States and grape variety names as being identical be confused with the French appellation that this grape is well known by other or similar to recognized appellations of of origin ‘‘Bourgogne Aligote´.’’ names. Thus, Saint Emilion is not origin within Europe. The EC and OIV further noted that included in the lists of grape names in some grape variety names in § 4.91 §§ 4.91 or 4.92. Trebbiano is listed in contain geographic terms which could Wine Grape Variety Appellation of Origin § 4.91 as the prime name and Ugni blanc (Nation) be confusing to consumers as to the as a synonym for this grape in § 4.92. origin of wines. These names were in The alternative names Pineau de la Alicante Bouschet .... Alicante (Spain). addition to those cited as resembling   Loire and Franken Riesling remain in Aligote ...... Bourgogne Aligote approved appellations of origin, and (France). the list at § 4.92(a) to be phased out by Carignane ...... CarinÄena (Spain). included the following: Early Burgundy, 1997 in favor of the names Chenin blanc Fume blanc ...... Blanc Fume de Pouilly Flame Tokay, Green Hungarian, Muscat and Sylvaner. (France). of Alexandria, Muscat Canelli, Mataro, ATF proposed Muscat blanc as a Johannisberg Ries- Johannisberg (Ger- Napa Gamay, and Naples. The OIV prime name in § 4.91 while Muscat ling. many). suggested synonyms for these grapes Frontignan was proposed as an Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 535 alternative name to be phased out in wine, type designations of varietal to indicate a Muscat grape source but 1996. Heublein commented that their significance. These designations apply not a specific Muscat grape variety. Beaulieu Vineyard facility has produced to wines which are composed of a ATF is amending § 4.28 to include Muscat Frontignan since 1920 and mixture of specific grape varieties, but Muscat and Moscato as type stated that it was important to the which do not contain enough of a single designations of varietal significance to company to retain this designation. variety to qualify for a varietal designate a wine which derives 75 Wine World Estates also commented in designation (75 percent). Nevertheless, percent of its volume from any Muscat favor of retaining Muscat Frontignan as these wines demonstrate characteristics grape source. Wines designated Muscat a grape variety name. of the grape varieties used to produce or Moscato under this section are not ATF agrees that this name has been them and their names imply some grape required to meet the additional used in labeling wines for decades in variety source. For example, under requirements imposed on Muscatel the United States, and it has received a proposed § 4.28, a wine labeled wines by § 4.21(a)(3). An appellation of degree of consumer recognition. Muscatel is required to derive at least 75 origin must appear in direct conjunction Nevertheless, ATF finds that the name percent of its volume from any Muscat with the designation Muscat or Moscato. Muscat Canelli is in far more grape source and otherwise conform to widespread use at the present time for the definition for Muscatel at Proprietary Names and Descriptive labeling domestic wines. Moreover, one § 4.21(a)(3). Wine designations in § 4.28 Terms goal of this rulemaking is to reduce the may stand alone on a label as the class Notice No. 581 large number of synonyms in use. Thus, and type designation of a grape wine. In its final report, the Committee ATF is phasing out the name Muscat ATF also proposed amending § 4.34 to noted that certain wines, which to the Frontignan as proposed in Notice No. require that an appellation of origin uninformed would appear to be varietal 749. However, in view of its appear in direct conjunction with these longstanding use and the time required type designations. wines, are in fact, labeled with to change labels and advertising to Three designations were proposed. In registered proprietary names. The Muscat blanc or Muscat Canelli, ATF addition to Muscatel, Scuppernong was Committee suggested that ATF should has decided to permit the use of Muscat proposed as an American wine deriving decline to approve such labels in the Frontignan as a grape variety not less than 75 percent of its volume future, and should phase out existing designation for an additional period of from bronze Muscadinia rotundifolia approvals of these labels. This time. Thus, Muscat Frontignan is added grapes, and Muscadine was proposed as suggestion was incorporated into Notice to the list of alternative names an American wine deriving at least 75 No. 581 which proposed that only the appearing at § 4.92(b). It may be used as percent of its volume from any approved grape variety name could be a designation until January 1, 1999. Muscadinia rotundifolia grape source. used as a varietal designation, without On review of the comments and William F. Doering and Wine World modification. Accordingly, proprietary literature concerning the proposed Estates commented in favor of these names and color descriptors would need prime grape name Pinot St. George, ATF proposals. Since there were no other to be shown separately on the label. finds that a more accurate name for this comments, ATF is adopting § 4.28 This proposal would have prohibited grape is Ne´grette. Moreover, this grape containing these designations. the use of a designation such as ‘‘White is not a Pinot although it was once Several respondents requested that Zinfandel,’’ but would have permitted a misidentified as Pinot noir. Riesling be added to this category to label reading ‘‘Zinfandel’’ on one line Consequently, ATF finds that Pinot St. designate a wine made with any with the description ‘‘A White Wine George is an incorrect name for this ‘‘Riesling’’ grapes. ATF is not adopting Made From Zinfandel Grapes’’ on a grape. As a result, we are removing this this comment. See the discussion under separate line. ‘‘Riesling issues.’’ name from § 4.91 and replacing it with Written Comments the prime name Ne´grette. Pinot St. The EC commented that ATF should George is listed in § 4.92(b) as an not permit variety names for Muscat This proposal was the most alternative name to be phased out by grapes which incorporate foreign controversial issue raised in Notice No. January 1, 1999. geographic terms. Specifically, they 581. Ninety-five respondents objected to On examination of the proposed requested that ATF not list the names it and in doing so, most respondents prime grape name Muscat Pantelleria, Muscat Canelli, Muscat du Moulin, objected to Notice No. 581 in its ATF finds no evidence that this is a Muscat Hamburg, Muscat of Alexandria, entirety. distinct grape variety. Instead, all Muscat Pantelleria, and Muscat Ottonel. Consumers and wineries alike evidence indicates this is a Muscat wine In lieu of these grape variety names, the commented that the use of color or style associated with the island of Pantelleria EC requested that the full name of the descriptors is a significant aid to off of Sicily and well known as grape ‘‘Muscat blanc a` petit grains’’ be consumers in selecting wines. Qualifiers ‘‘Moscato di Pantelleria.’’ The grape used, or that the general label term such as ‘‘white,’’ ‘‘blush,’’ ‘‘blanc,’’ from which Moscato di Pantelleria ‘‘Muscat’’ be permitted. ‘‘noir,’’ ‘‘nouveau,’’ or ‘‘rose´’’ describe wines are made is actually the Zibibbo This final rule authorizes Muscat the style of wine and enable consumers or Muscat of Alexandria grape. variety names which incorporate foreign to differentiate between wines of the Therefore, Muscat Pantelleria is geographic terms since we find these same varietal origin but produced in removed from the list of prime grape names are recognized as distinct grape different styles. Wineries cited the names in § 4.91 and added to § 4.92(b) varieties. ATF is, however, responding economic importance of ‘‘blush wines.’’ as an alternative name for Muscat of to the EC request by permitting use of Some respondents stated that adoption Alexandria to be phased out by January the term ‘‘Muscat’’ or ‘‘Moscato’’ as a of this proposal would severely damage 1, 1999. labeling designation. ATF believes these the market for Zinfandel grapes. As a terms have widespread consumer consequence, respondents claimed the Type Designations of Varietal recognition as a wine derived from proposal would have a far reaching and Significance Muscat grapes. We further find that devastating impact on grapegrowers, In Notice No. 749, ATF proposed a many domestic wine labels exist which wineries and consumers. A few new category for designating American use the designations Muscat or Moscato respondents cited the lack of need or 536 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations justification for this proposal, and the is not aware of any consumer confusion under § 4.39, or if they contain the word lack of consumer confusion over use of or deception resulting from the use of ‘‘Riesling.’’ such terms. descriptive terms with grape variety Paragraph (d) gives the Director the Similarly, respondents objected to the names on labels, and ATF does not authority to make a case-by-case proposal to prohibit the use of strictly believe that consumers need to be determination whether a requested proprietary terms with grape variety protected from such labeling. grape variety name would be names. Proprietary names, unlike Thus, ATF will continue to permit the misleading. Under this paragraph, the descriptive terms, consist of a registered use of descriptive and proprietary Director has authority to make a name used to differentiate a names on labels in conjunction with determination whether grape variety winemaker’s varietal wine from similar grape variety names. ATF will, however, names containing words of geographic wines made by other winemakers. examine labels to ensure that such terms significance, place names, or foreign are not used in a manner that is Notice No. 749 words are misleading under § 4.39. deceptive or misleading. Variety names found to be misleading In view of the preponderance of would not be approved by the Director. comments opposing a prohibition on the Approval of Future Variety Names This section does not prohibit use of use of proprietary and descriptive terms One part of the Committee’s charter such terms in grape variety names if in conjunction with varietal was to recommend guidelines for the their use is found by the Director not to designations, ATF did not include this wine industry and ATF to follow in be misleading. proposal in Notice No. 749. ATF stated determining the appropriateness of that we would take the position that names suggested in the future for new ATF notes that it is not the intent of label designations which incorporate grape varieties. The Committee’s § 4.93(d) to prohibit the use of proprietary or descriptive terms are recommended guidelines were established grape variety names which misleading if their use results in incorporated into Notice No. 581. may contain terms of geographic consumer deception. As proposed, a letterhead application significance, place names, or foreign to the Director would be sufficient to words, but rather to discourage the use Comments to Notice No. 749 request approval of a new grape variety of these kinds of terms in naming new Only six respondents commented on name. Evidence regarding the name, its grape varieties. This paragraph applies the use of proprietary and descriptive use in winemaking, and its cultivation to grape varieties developed in the terms with grape variety names. The in the United States would be submitted United States, but does not apply to Wine Institute, NABI, Wine World as part of the application. Supporting existing grape varieties growing in Estates, and Cain Cellars fully supported evidence such as a plant patent, acreage foreign countries and which are ATF’s position not to prohibit their use. information, and scientific references introduced into viticultural use in the William F. Doering stated that the would also be required. United States. proposal is sensible, but that some In addition to outlining the procedure Paragraph (e) provides that the existing proprietary names are for applying for a grape variety name, Director will publish the list of misleading and that ATF should deal the Committee made recommendations approved names annually in the Federal with these names on a case-by-case regarding suitability of new names. As Register. This publication will inform basis. The Wine Institute requested that proposed in Notice No. 581, a new grape consumers and wineries of periodic ATF seek to secure acceptance of some variety name could not contain words of changes to the list of approved names of these terms, such as White Zinfandel, geographical significance; could not without formally amending §§ 4.91 or on a worldwide basis to assist the have been previously used for another 4.92 every time a name is added. From international sales of American wines. variety; could not contain foreign time to time, ATF will incorporate This aspect of their comment is beyond words; could not contain misleading published changes to the list into the scope of this rulemaking. names; and could not contain §§ 4.91 or 4.92. ATF will not use Professor H.P. Olmo, The University ‘‘Riesling’’ as part of the name. Federal Register publication as a means of California, Davis, and a Committee On the basis on comments made to to avoid rulemaking on names which member, objected to the proposal to Notice No. 581, ATF made certain may be controversial. permit use of descriptive terms with changes in the procedures for approval variety names. He stated that to allow of new grape variety names. These were Text of Regulations such use would nullify the concept of incorporated in proposed § 4.93 in List of Prime Names, § 4.91 grape variety classification, and would Notice No. 749. Since there were no confuse grape variety names with a comments directed to this section, it is Section 4.91 contains the list of wine type. He further stated that to adopted as proposed. approved prime grape variety names. permit them would cause the Paragraph (a) gives the procedure These names may be used as the label multiplication and falsification of grape used to petition the Director for designation of American wines. Only variety names and cause the mistrust of approval of a grape variety name. This the prime grape name appears in the grape variety names. procedure applies in the case of newly- alphabetical listing while approved developed grape varieties as well as for synonyms and spelling variants appear Conclusion existing varieties which come into use in parentheses following the prime Respondents to this notice as well as for wine production in the United name of the grape. Synonyms and to Notice No. 581 have demonstrated States. spelling variants may, however, be used the value of proprietary names and Paragraph (b) sets forth evidence standing alone on a label as the descriptive terms in providing the necessary to document a newly- designation for American grape wines. consumer with useful information. ATF developed grape variety. For example, ‘‘Riesling’’ is a listed as a further acknowledges the economic Paragraph (c) sets forth standards for prime name, with the synonym ‘‘White importance that wines labeled with the approval of any grape name. Names Riesling’’ following in parentheses. descriptive terms such as ‘‘blush’’ or will not be approved if they have Either name may be used as a label ‘‘White Zinfandel’’ have to the previously been used for a different designation for wine made from White American wine industry. Finally, ATF grape variety, if they are misleading Riesling grapes. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 537

Section 4.23 stated that ATF’s certification under the authorized synonyms for some grape Notice No. 749 contained the full text Regulatory Flexibility Act, 5 U.S.C. varieties because these names are of a new § 4.23, Varietal (grape type) § 605, did not contain a succinct widely used by domestic wineries and labeling. This text was included because statement explaining the reasons for the have received a degree of consumer ATF is removing existing § 4.23 which certification as required by the Act. His acceptance. does not apply after December 31, 1982, second comment expressed concerns ATF has provided a lengthy period for and replacing it with a new section the SBA found with the proposed rule, phasing out the use of alternative grape applicable after that date. This new and he stated that adoption of a final variety names. ATF first proposed their section formerly appeared at § 4.23a. rule could be disadvantageous to small elimination in Notice No. 581, The only significant change between wineries. published in September 1986. These existing § 4.23a and the new § 4.23 is Kerester noted that phasing out of names are phased out in 1996. Names the incorporation of a reference to new some alternative grape variety names newly added to the list of alternative § 4.28, Type designations of varietal would prohibit their continued use by names may be used until 1999. Thus, significance. The use on a label of a type small wineries. However, some of these ATF has provided ample time for the designation of varietal significance will names are available for use by conversion of labeling and advertising require an appellation of origin to winemakers in other nations. Hence, he to the prime grape variety names listed appear in direct conjunction with it stated that consumers accustomed to in § 4.91. ATF is aware that domestic wineries such as ‘‘Georgia Scuppernong’’ or use of these names would seek imported compete against foreign wineries and ‘‘California Muscatel.’’ wines bearing the familiar names, to the detriment of large and small domestic that grape variety names used in Section 4.34, Class and Type wine producers. labeling are a factor in such This section is amended to permit a Next, he stated that some wineries competition. In this final rule, ATF lists type designation of varietal significance may be forced to make operational Riesling as a prime grape name. This listed in § 4.28 to be used as a class and changes in response to the proposals. action is made in part because nearly all type designation for American wine. For some small wineries, he stated this imported wines are labeled simply would require a $300,000 to $500,000 Riesling rather than Johannisberg Spelling, Capitalization and investment and require three to five Riesling or White Riesling. By listing Punctuation years time. This would disadvantage Riesling as a prime name, ATF is The Chicago Wine School submitted a small wineries which have invested in placing domestic wineries on an equal comment correcting certain diacritical certain grape varieties, while larger footing with foreign wineries in the marks as they appeared in the list of wineries could more easily adapt to the labeling of this important worldwide prime names in § 4.91. Based on this changes. varietal wine. ATF has also authorized comment, ATF has corrected the Finally, Kerester requested that ATF a few other synonyms such as Pinot diacritical marks for Alvarelha˜o and consider the extent to which the Grigio which is the name used in Mourve`dre in § 4.91. changes would inhibit creativity and labeling certain wines produced in With the effective date of this final innovation, and whether the restricting foreign nations and which compete rule, bottlers are required to spell grape of names would constitute a precedent directly against American wines made variety names as they appear in the lists which could be detrimental to small from the same grapes. in §§ 4.91 and 4.92 since this producers. As a result of these concerns, As a result of these actions, ATF does rulemaking is intended to standardize Kerester suggested that ATF prepare a not believe that large or small domestic grape variety names to the maximum regulatory flexibility analysis before wineries will lose sales of varietal wines extent possible. When a variant spelling issuing the final regulations. to foreign wineries simply because is recognized, that spelling appears in ATF does not believe that consumers certain names are not available for use parentheses following the prime name. will be driven to the purchase of in labeling. Other variant spellings will not be imported wines simply because certain No other respondents to Notice No. permitted unless approved by the grape variety names are not available to 749 commented that small wineries Director. domestic wineries. There are thousands would need to make any operational Wine World Estates supported ATF’s of grape variety names used in changes in response to those proposals, proposal not to require upper or lower producing wines worldwide. The nor did any other respondents allege case type for grape variety names. This current OIV list contains 71 pages of that small wineries would bear position is reflected in this section grape names and synonyms which are exorbitant costs associated with the which permits wine variety names to in use in 27 winemaking nations. ATF phase out of certain grape variety appear either capitalized or in lower believes it would be hopelessly names. In conjunction with one case, and to appear in any style or type confusing to consumers to permit proposal made in Notice No. 581, which is conspicuous and meets the domestic winemakers to use all numerous respondents stated they minimum type size requirements. Grape available synonyms for labeling wines. would incur large costs and suffer variety names may be spelled with or Through the Committee’s work and this market share loss due to the proposed without diacritical marks (umlauts, rulemaking effort, ATF has selected the prohibition on use of descriptive or accent marks, hyphens, or tildes). ATF most appropriate prime name for each proprietary terms with grape variety believes these policies, incorporated in specific grape used in winemaking; the names. ATF removed this proposal from the text of § 4.91, will afford bottlers majority of other names are to be phased Notice No. 749. maximum flexibility when designing out. For the most part, the names being Respondents to Notice No. 749 cited labels. phased out are little used by domestic only one issue as raising Regulatory wineries and have limited consumer Flexibility Act concerns. ATF, however, Regulatory Flexibility Act Issues recognition. Some alternative names does not believe that issue is a result of Thomas P. Kerester, Chief Counsel for apply to American grape varieties for the proposals concerning grape variety Advocacy of the Small Business which there is no imported competition. names. As documented elsewhere, Administration (‘‘SBA’’), submitted two Furthermore, due to written comments growers in California have long grown a comments to Notice No. 749. The first in response to both notices, we have grape identified as ‘‘Pinot blanc.’’ 538 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations

Recent ampelographic evidence reveals wines both by large and small wineries, In response to Notice No. 749, no that this grape is actually the variety but is not projected to have a substantial comments regarding the proposed Melon. Thus, these grapes are economic impact on small wineries. information collection requirement were improperly identified; moreover, the use This final rule will not: (1) impose, or received either by the Chief, Information of the name Pinot blanc for Melon otherwise cause, a significant increase Programs Branch, Bureau of Alcohol, grapes is misleading to consumers since in the reporting, recordkeeping, or other Tobacco and Firearms, or by the OMB the true Pinot blanc grape is now grown compliance burdens on a substantial Desk Officer for the Bureau of Alcohol, in the United States and is used to label number of small entities, or (2) have Tobacco and Firearms. varietal wines. To provide accurate significant secondary or incidental Comments concerning the accuracy of identification of wine for consumers, effects on a substantial number of small this burden estimate should be directed ‘‘Pinot blanc’’ grapes in California must entities. Accordingly, a regulatory to the Chief, Information Programs be redesignated with their proper name, flexibility analysis is not required. Branch, Room 3400, Bureau of Alcohol, Melon or Melon de Bourgogne. Executive Order 12866 Tobacco and Firearms, 650 Redesignation of these grapes is an Massachusetts Avenue, NW, enforcement issue and not a result of It has been determined that this rule Washington, DC 20226, and to the this rulemaking. While there are costs is not a significant regulatory action, Office of Information and Regulatory associated with redesignating these because (1) It will not have an annual Affairs, Office of Management and grapes, ATF does not believe that these effect on the economy of $100 million Budget, Washington, D.C. 20503; costs are a result of this final rule. or more or adversely affect in a material Attention: Desk Officer for the Bureau of ATF does not agree with the SBA way the economy, a sector of the Alcohol, Tobacco and Firearms. comment that the changes in this notice economy, productivity, competition, would restrict creativity and innovation jobs, the environment, public health or Drafting Information in labeling wines, to the extent such safety, or state, local, or tribal The principal author of this document labeling is truthful and accurate. As governments or communities; (2) Create is Charles N. Bacon, Wine, Beer, and noted elsewhere, ATF is not restricting a serious inconsistency or otherwise Spirits Regulations Branch, Regulatory or prohibiting use of descriptive or interfere with an action taken or Enforcement, Bureau of Alcohol, proprietary terms in conjunction with planned by another agency; (3) Tobacco and Firearms. grape variety names. ATF believes use Materially alter the budgetary impact of of these terms is a primary method of entitlements, grants, user fees, or loan List of Subjects in 27 CFR Part 4 innovative labeling of grape variety programs or the rights and obligations of Advertising, Consumer protection, names. recipients thereof; or (4) Raise novel Customs duties and inspections, For the reasons elaborated above, ATF legal or policy issues arising out of legal Imports, Labeling, Packaging and does not believe this final rule will have mandates, the President’s priorities, or containers, Wine. a substantial economic effect on small the principles set forth in Executive Authority and Issuance entities. Thus, ATF is not preparing an Order 12866. initial or final Regulatory Flexibility Paperwork Reduction Act Accordingly, 27 CFR Part 4, Labeling Analysis. and Advertising of Wine, is amended as The collection of information follows: Effective Dates contained in this final rule has been Paragraph 1. The authority citation With the effective date of this final reviewed and approved by the Office of for Part 4 continues to read as follows: rule, the name of a grape variety may Management and Budget (OMB) in Authority: 27 U.S.C. 205. not be used as a type designation for an accordance with the requirements of the American wine unless it is approved by Paperwork Reduction Act of 1980 (44 Par. 2. Section 4.23 is revised to read the Director and listed in §§ 4.91 or U.S.C. 3504(h)) under control number as follows: 1512–0513. The estimated annual 4.92, or listed in an annual Federal § 4.23 Varietal (grape type) labeling. Register listing of grape variety names. reporting and/or recordkeeping burden Grape variety names appearing on the is 4 hours. Estimated total annual (a) General. The names of one or more list of alternative names at § 4.92(a) may burden per record-keeper is 2 hours. grape varieties may be used as the type be only used as the type designations for The estimated number of respondents is designation of a grape wine only if the American wines bottled before January two. The estimated annual frequency of wine is also labeled with an appellation 1, 1997. Grape variety names appearing responses is one. of origin as defined in § 4.25a. at § 4.92(b) may only be used as type This final rule creates a new (b) One variety. Except as provided in designations for American wines bottled letterhead notice to be used by paragraph (c) of this section, the name before January 1, 1999. respondents in petitioning ATF to add of a single grape variety may be used as The procedure at § 4.93 for petitioning grape variety names to the list of the type designation if not less than 75 the Director to approve additional grape approved prime grape names in § 4.91. percent of the wine is derived from variety names is effective 30 days after The collection of information in this grapes of that variety, the entire 75 publication of this final rule. regulation is in the following section: 27 percent of which was grown in the CFR 4.93. This information is used by labeled appellation of origin area. Regulatory Flexibility Act ATF in order to verify that the grape (c) Exceptions. (1) Wine made from It is hereby certified that this variety name petitioned for is the name any Vitis labrusca variety (exclusive of regulation will not have a significant of the identified grape, that the grape is hybrids with Vitis labrusca parentage) economic impact on a substantial a available for viticultural use in the may be labeled with the variety name if: number of small entities. As discussed United States, and that the name to be (i) Not less than 51 percent of the elsewhere in this preamble, this final used will not be misleading or wine is derived from grapes of the rule will not impose recordkeeping or deceptive. The likely respondents are named variety; reporting burdens on small entities. The businesses and other for-profit (ii) The statement ‘‘contains not less standardization of grape variety names institutions, non-profit institutions, and than 51 percent (name of variety)’’ is will affect labeling and marketing of small businesses or organizations. shown on the brand label, back label, or Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 539 a separate strip label, (except that this (b) Muscatel. An American wine Arneis statement need not appear if 75 percent which derives its predominant taste, Aurore or more of the wine is derived from aroma, characteristics and at least 75 Bacchus grapes of the named variety); and percent of its volume from any Muscat Baco blanc (iii) The entire qualifying percentage grape source, and which meets the Baco noir of the named variety was grown in the requirements of § 4.21(a)(3). Barbera labeled appellation of origin area. (c) Muscat or Moscato. An American Beacon (2) Wine made from any variety of any wine which derives at least 75 percent Beclan species found by the Director upon of its volume from any Muscat grape Bellandais appropriate application to be too source. Beta strongly flavored at 75 percent (d) Scuppernong. An American wine Black Pearl minimum varietal content may be which derives at least 75 percent of its Blanc Du Bois labeled with the varietal name if: volume from bronze Muscadinia Blue Eye (i) Not less than 51 percent of the rotundifolia grapes. Bonarda wine is derived from grapes of that Par. 5. Section 4.34 is amended by Bountiful variety; revising the second sentence of Burdin 4672 (ii) The statement ‘‘contains not less paragraph (a); by revising paragraph Burdin 5201 than 51 percent (name of variety)’’ is (b)(1); by redesignating paragraphs (b) Burdin 11042 shown on the brand label, back label, or (2), (3), and (4), as paragraphs (b) (3), (4), Burgaw a separate strip label (except that this and (5), respectively; and by adding a Burger statement need not appear if 75 percent new paragraph (b)(2), to read as follows: Cabernet franc or more of the wine is derived from Cabernet Pfeffer grapes of the named variety); and § 4.34 Class and type. Cabernet Sauvignon (iii) The entire qualifying percentage (a) * * * In the case of still grape Calzin of the named variety was grown in the wine there may appear, in lieu of the Campbell Early (Island Belle) labeled appellation of origin area. class designation, any varietal (grape Canada Muscat (d) Two or more varieties. The names type) designation, type designation of Captivator of two or more grape varieties may be varietal significance, semigeneric Carignane used as the type designation if: geographic type designation, or Carlos (1) All of the grapes used to make the geographic distinctive designation, to Carmene`re wine are of the labeled varieties; which the wine may be entitled. * ** Carmine (2) The percentage of the wine (b) * * * Carnelian derived from each variety is shown on (1) A varietal (grape type) designation Cascade the label (with a tolerance of plus or is used under the provisions of § 4.23; Castel 19–637 minus 2 percent); and (2) A type designation of varietal Catawba (3)(i) If labeled with a multicounty significance is used under the Cayuga White appellation of origin, the percentage of provisions of § 4.28; Centurion the wine derived from each variety from * * * * * Chambourcin each county is shown on the label; or Par. 6. Subpart J is added to read as Chancellor (ii) If labeled with a multistate follows: Charbono Chardonel appellation of origin, the percentage of Subpart JÐAmerican Grape Variety Names the wine derived from each variety from Chardonnay Sec. each state is shown on the label. Chasselas dore´ 4.91 List of approved prime names. Chelois (e) List of approved variety names. 4.92 Alternative names permitted for Effective February 7, 1996, the name of Chenin blanc temporary use. Chief a grape variety may be used as a type 4.93 Approval of grape variety names. designation for an American wine only Chowan if that name has been approved by the Subpart JÐAmerican Grape Variety Cinsaut (Black Malvoisie) Director. A list of approved grape Names Clairette blanche variety names appears in Subpart J of Clinton § 4.91 List of approved prime names. this part. Colombard (French Colombard) The following grape variety names Colobel § 4.23a [Removed] have been approved by the Director for Cortese Par. 3. Section 4.23a is removed. use as type designations for American Corvina Par. 4. Subpart C is amended by wines. When more than one name may Concord adding § 4.28 to read as follows: be used to identify a single variety of Conquistador grape, the synonym is shown in Couderc noir § 4.28 Type designations of varietal parentheses following the prime grape Cowart significance. names. Grape variety names may appear Creek The following are type designations of on labels of wine in upper or in lower Cynthiana (Norton) varietal significance for American wine. case, and may be spelled with or Dearing These names may be used as type without the hyphens or diacritic marks De Chaunac designations for American wines only if indicated in the following list. Delaware the wine is labeled with an appellation Agwam Diamond of origin as defined in § 4.25a. Albemarle Dixie (a) Muscadine. An American wine Aleatico Dolcetto which derives at least 75 percent of its Alicante Bouschet Doreen volume from Muscadinia rotundifolia Aligote´ Dulcet grapes. Alvarelha˜ o Durif 540 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations

Dutchess Mission Steuben Early Burgundy Missouri Riesling Stover Early Muscat Mondeuse (Refosco) Sugargate Edelweiss Montefiore Sultanina (Thomspon Seedless) Eden Moore Early Summit Ehrenfelser Morio-Muskat Suwannee Ellen Scott Mourve`dre (Mataro) Sylvaner Elvira Mu¨ ller-Thurgau Symphony Emerald Riesling Mu¨ nch Syrah (Shiraz) Feher Szagos Muscadelle Swenson Red Ferna˜ o Pires Muscat blanc (Muscat Canelli) Tarheel Fern Munson Muscat du Moulin Taylor Flame Tokay Muscat Hamburg (Black Muscat) Tempranillo (Valdepen˜ as) Flora Muscat of Alexandria Teroldego Florental Muscat Ottonel Thomas Folle blanche Naples Thompson Seedless (Sultanina) Fredonia Nebbiolo Tinta Madeira Freisa Ne´grette Tinto ca˜ o Fry New York Muscat Tocai Friulano Furmint Niagara Topsail Gamay noir Noah Touriga Garronet Noble Traminer Gewu¨ rztraminer Norton (Cynthiana) Trousseau Gladwin 113 Ontario Trousseau gris Glennel Orange Muscat Ugni blanc (Trebbiano) Gold Palomino Valdiguie´ Golden Isles Pamlico Valerien Golden Muscat Pedro Ximenes Van Buren Grand Noir Petit Verdot Veeblanc Green Hungarian Petite Sirah Veltliner Grenache Peverella Ventura Grignolino Pinotage Verdelet Grillo Pinot blanc Verdelho Gros Verdot Pinot gris (Pinot Grigio) Vidal blanc Helena Pinot noir Villard blanc Herbemont Precoce de Malingre Villard noir Higgins Pride Vincent Horizon Primitivo Viognier Hunt Rayon d’Or Vivant Iona Ravat 34 Welsch Rizling Isabella Ravat 51 (Vignoles) Watergate Ives Ravat noir Welder James Redgate Yuga Jewell Regale Zinfandel Joannes Seyve 12–428 Riesling (White Riesling) Joannes Seyve 23–416 Rkatziteli (Rkatsiteli) § 4.92 Alternative names permitted for Kerner Roanoke temporary use. Kay Gray Rosette The following alternative names Kleinberger Roucaneuf shown in the left column may be used LaCrosse Rougeon as the type designation for American Lake Emerald Roussanne wine in lieu of the prime name of the Lambrusco Royalty grape variety shown in the right Landal Rubired column. Alternative names listed in the Landot noir Ruby Cabernet left column may only be used for wine Lenoir St. Croix bottled prior to the date indicated. Le´on Millot Saint Macaire (a) Wines bottled prior to January 1, Limberger (Lemberger) Salem 1997. Madeline Angevine Salvador Alternative Name/Prime Name Magnolia Sangiovese Magoon Sauvignon blanc (Fume´ blanc) Baco 1—Baco noir Malbec Scarlet Baco 22A—Baco blanc Malvasia bianca Scheurebe Bastardo—Trousseau Mare´chal Foch Se´millon Black Spanish—Lenoir Marsanne Sereksiya Burdin 7705—Florental Melody Seyval (Seyval blanc) Cayuga—Cayuga White Melon de Bourgogne (Melon) Siegerrebe Chancellor noir—Chancellor Merlot Siegfried Chasselas—Chasselas dore´ Meunier (Pinot Meunier) Southland Chevrier—Se´millon Mish Souza˜ o Chelois noir—Chelois Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 541

Couderc 71–20—Couderc noir (b) For the approval of names of new are consistent with the statutory Couderc 299–35—Muscat du Moulin grape varieties, documentation authority on which they are based, and Foch—Mare´chal Foch submitted with the petition to establish to promote the safer, more efficient, and Franken Riesling—Sylvaner the items in paragraph (a) of this section more secure operation of the Pentagon Gutedel—Chasselas dore´ may include— Reservation. Ives Seedling—Ives (1) reference to the publication of the Jacquez—Lenoir name of the variety in a scientific or DATES: This rule is effective January 8, Joannes Seyve 26–205—Chambourcin professional journal of horticulture or a 1996. Comments are requested by March Landot 244—Landal published report by a professional, 8, 1996. Landot 4511—Landot noir scientific or winegrowers’ organization, ADDRESSES: Forward comments to Millot—Leon Millot (2) reference to a plant patent, if so Moore’s Diamond—Diamond Washington Headquarters Services, patented, and Office of General Counsel, 1155 Defense Norton Seedling—Norton (3) information pertaining to the Pfeffer Cabernet—Cabernet Pfeffer Pentagon Room 1D197, Washington, DC commercial potential of the variety, 20301–1155. Pineau de la Loire—Chenin blanc such as the acreage planted and its Pinot Chardonnay—Chardonnay location or market studies. FOR FURTHER INFORMATION CONTACT: Ravat 262—Ravat noir (c) The Director will not approve a Rula¨ nder—Pinot gris Thomas R. Brooke, (703) 693–7374. grape variety name if: Seibel 128—Salvador (1) The name has previously been SUPPLEMENTARY INFORMATION: The Seibel 1000—Rosette used for a different grape variety; current regulations governing conduct Seibel 4986—Rayon d’Or (2) The name contains a term or name on the Pentagon Reservation were Seibel 5279—Aurore promulgated following the transfer of Seibel 5898—Rougeon found to be misleading under § 4.39; or control of the Pentagon Reservation Seibel 7053—Chancellor (3) The name of a new grape variety Seibel 8357—Colobel contains the term ‘‘Riesling.’’ from the General Services Seibel 9110—Verdelet (d) For new grape varieties developed Administration to the Department of Seibel 9549—De Chaunac in the United States, the Director may Defense. Based on enforcement Seibel 10878—Chelois determine if the use of names which experience gained since that time, the Seibel 13053—Cascade contain words of geographical Department of Defense now seeks to Seibel 14596—Bellandais significance, place names, or foreign revise those regulations to ensure their Seyve-Villard 5–276—Seyval words are misleading under § 4.39. The consistency with the statutory authority Seyve-Villard 12–309—Roucaneuf Director will not approve the use of a on which they are based, and to Seyve-Villard 12–375—Villard blanc grape variety name found to be promote the safer, more efficient, and Seyve-Villard 18–283—Garronet misleading. more secure operation of the Pentagon Seyve-Villard 18–315—Villard noir (e) The Director shall publish the list Reservation. Seyve-Villard 23–410—Valerien of approved grape variety names at least Sweetwater—Chasselas dore´ annually in the Federal Register. Executive Order 12866, ‘‘Regulatory Planning and Review’’ Verdelet blanc—Verdelet (Approved by the Office of Management and Vidal 256—Vidal blanc Budget under Control Number 1512–0513) This rule is not a significant rule as Virginia Seedling—Norton Signed: January 5, 1995. Wa¨ lschriesling—Welsch Rizling defined under section 3(f)(1) through Welschriesling—Welsch Rizling Daniel R. Black, 3(f)(4) of Executive Order 12866. Acting Director. (b) Wines bottled prior to January 1, Public Law 96–354, ‘‘Regulatory Approved: November 24, 1995. 1999. Flexibility Act’’ (5 U.S.C. 601) John P. Simpson, Alternative Name/Prime Name Deputy Assistant Secretary (Regulatory, Tariff This rule will not have a significant Cabernet—Cabernet Sauvignon & Trade Enforcement). economic impact on a substantial Grey Riesling—Trousseau gris Editorial Note: This document was number of small entities because it Johannisberg Riesling—Riesling received at the Office of the Federal Register affects only those entities and persons Muscat Frontignan—Muscat blanc on January 2, 1996. who are on the Pentagon Reservation. Muscat Pantelleria—Muscat of Alexandria [FR Doc. 96–148 Filed 1–5–96; 8:45 am] Public Law 96–511, ‘‘Paperwork Napa Gamay—Valdiquie´ BILLING CODE 4810±31±M Reduction Act’’ (44 U.S.C. Ch. 44) Pinot Saint George—Ne´grette Sauvignon vert—Muscadelle It has been certified that this rule does DEPARTMENT OF DEFENSE not impose any reporting or § 4.93 Approval of grape variety names. recordkeeping requirements under the (a) Any interested person may Office of the Secretary Paperwork Reduction Act of 1980. petition the Director for the approval of List of Subjects in 32 CFR Parts 40b and a grape variety name. The petition may 32 CFR Parts 40b and 234 234 be in the form of a letter and should Conduct on the Pentagon Reservation provide evidence of the following— Alcohol abuse, Drug testing; Federal (1) acceptance of the new grape AGENCY: Office of the Secretary, DoD. buildings and facilities, Security variety, ACTION: Interim final rule with request measures, Traffic regulations. (2) the validity of the name for for comments. identifying the grape variety, Accordingly, chapter I of title 32 of (3) that the variety is used or will be SUMMARY: This document revises DoD the Code of Federal Regulations, under used in winemaking, and policy concerning conduct on the the authority of 10 U.S.C. 301, is (4) that the variety is grown and used Pentagon Reservation. The revisions are amended by removing part 40b and in the United States. intended to ensure that DoD regulations adding part 234 to read as follows: 542 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations

PART 234ÐCONDUCT ON THE conveyances, either singly or together, limited to employees and other persons PENTAGON RESERVATION while using any road, path, street, or with proper authorization. other thoroughfare for the purposes of (b) All persons entering or upon the Sec. travel. Pentagon Reservation shall, when 234.1 Definitions. Vehicle. Any vehicle that is self- 234.2 Applicability. required and/or requested, display 234.3 State law applicable. propelled or designed for self- identification to authorized persons. 234.4 Admission to property. propulsion, any motorized vehicle, and (c) All packages, briefcases, and other 234.5 Trespassing. any vehicle drawn by or designed to be containers brought into, on, or being 234.6 Interfering with agency functions. drawn by a motor vehicle, including any removed from facilities or restricted 234.7 Disorderly conduct. device in, upon, or by which any person areas on the Pentagon Reservation are 234.8 Preservation of property. or property is or can be transported or subject to inspection and search by 234.9 Explosives. drawn upon a highway, hallway, or authorized persons. Persons entering on 234.10 Weapons. pathway; to include any device moved facilities or restricted areas who refuse 234.11 Alcoholic beverages and controlled by human or animal power, whether substances. to permit an inspection and search will 234.12 Restriction on animals. required to be licensed in any state or be denied entry. 234.13 Soliciting, vending, and debt otherwise. (d) Any person or organization collection. Weapons. Any firearm, compressed desiring to conduct activities anywhere 234.14 Posting of materials. gas, or spring-powered pistol or rifle, on the Pentagon Reservation shall file 234.15 Use of visual recording devices. bow and arrow, crossbow, blowgun, an application for permit with the 234.16 Gambling. spear gun, hand-thrown spear, applicable Building Management Office. 234.17 Vehicles and traffic safety. slingshot, irritant gas device, explosive Such application shall be made on a 234.18 Enforcement of parking regulations. device, or any other implement 234.19 Penalties and effect on other laws. form provided by the Department of designed to discharge missiles; or a Defense and shall be submitted in the Authority: 10 U.S.C. 131 and 2674(c).s weapon, device, instrument, material, or manner specified by the Department of § 234.1 Definitions. substance, animate or inanimate, that is Defense. Violation of the conditions of As used in this part: used for or is readily capable of, causing a permit issued in accordance with this Authorized person. An employee or death or serious bodily injury, including section is prohibited and may result in agent of the Defense Protective Service, any weapon the possession of which is the loss of access to the Pentagon or any other Department of Defense prohibited under the laws of the state in Reservation. which the Pentagon Reservation or employee or agent who has delegated § 234.5 Trespassing. authority to enforce the provisions of portion thereof is located; except that this part. such term does not include a pocket (a) Trespassing, entering, or remaining Firearm. A loaded or unloaded pistol, knife with a blade of less than 21⁄2 in or upon property not open to the rifle, shotgun, or other weapon which is inches in length. public, except with the express invitation or consent of the person or designed to, or may be readily converted § 234.2 Applicability. to, expel a projectile by the ignition of persons having lawful control of the a propellant. The provisions of this part apply to all property, is prohibited. Failure to obey Operator. A person who operates, areas, lands, and waters on or adjoining an order to leave under paragraph (b) of drives, controls, otherwise has charge the Pentagon Reservation and under the this section, or reentry upon property of, or is in actual physical control of a jurisdiction of the United States, and to after being ordered to leave or not mechanical mode of transportation or all persons entering in or on the reenter under paragraph (b) of this any other mechanical equipment. property. They supplement those penal section, is also prohibited. Pentagon Reservation. Area of land provisions of Title 18, United States (b) Any person who violates a and improvements thereon, located in Code, relating to crimes and criminal Department of Defense rule or Arlington, Virginia, on which the procedures and those provisions of State regulation may be ordered to leave the Pentagon Office Building, Federal law that are federal criminal offenses by Pentagon Reservation by an authorized Building Number 2, the Pentagon virtue of the Assimilative Crimes Act, person. A violator’s reentry may also be heating and sewage treatment plants, 18 U.S.C. 13. prohibited. and other related facilities are located, § 234.3 State law applicable. § 234.6 Interfering with agency functions. including all roadways, walkways, Unless specifically addressed by waterways, and all areas designated for The following are prohibited: regulations in this part, traffic and the the parking of vehicles. (a) Interference. Threatening, Permit. A written authorization to use of vehicles within the Pentagon resisting, intimidating, or intentionally engage in uses or activities that are Reservation are governed by State law. interfering with a government employee otherwise prohibited, restricted, or § 234.4 Admission to property. or agent engaged in an official duty, or regulated. on account of the performance of an (a) Access to the Pentagon Reservation official duty. Possession. Exercising direct physical or facilities thereon shall be restricted in (b) Violation of a lawful order. control or dominion, with or without accordance with Department of Defense Violating the lawful order of a ownership, over property. Administrative Instruction Number 30 1 State law. The applicable and government employee or agent in order to ensure the orderly and nonconflicting laws, statutes, authorized to maintain order and secure conduct of Department of regulations, ordinances, and codes of control public access and movement Defense business. Admission to the state(s) and other political during fire fighting operations, search facilities or restricted areas shall be subdivision(s) within whose exterior and rescue operations, law enforcement boundaries the Pentagon Reservation or actions, and emergency operations that 1 Forward written requests for copies of the a portion thereof is located. document to the Directorate for Freedom of involve a threat to public safety or Traffic. Pedestrians, ridden or herded Information and Security Review, Rm 2C757, government resources, or other activities animals, vehicles, and other Pentagon, Washington DC 20301–1400. where the control of public movement Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 543 and activities is necessary to maintain accordance with applicable Federal and oneself or another person, or damage order and public health or safety. State laws. property is prohibited. (c) False information. Knowingly (b) Using or possessing fireworks or giving a false or fictitious report or other firecrackers is prohibited, except in § 234.12 Restriction on animals. false information: designated areas under such conditions Animals, except guide dogs for (1) To an authorized person as may be established by the applicable persons with disabilities, shall not be investigating an accident or violation of Building Management Office or brought upon the Pentagon Reservation law or regulation; or pursuant to the terms and conditions of for other than official purposes. (2) On an application for a permit. a permit issued by the applicable § 234.13 Soliciting, vending, and debt (d) False report. Knowingly giving a Building Management Office, and in collection. false report for the purpose of accordance with applicable State law. Commercial or political soliciting, misleading a government employee or (c) Violation of the conditions vending of all kinds, displaying or agent in the conduct of official duties, established by the applicable Building distributing commercial advertising, or making a false report that causes a Management Office or of the terms and collecting private debts or soliciting response by the government to a conditions of a permit issued in alms upon the Pentagon Reservation is fictitious event. accordance with this section is prohibited. This does not apply to: prohibited and may result in the loss of § 234.7 Disorderly conduct. (a) National or local drives for funds access to the Pentagon Reservation. for welfare, health, or other purposes as A person commits disorderly conduct § 234.10 Weapons. authorized by 5 CFR parts 110 and 950, when, with intent to cause public alarm, Solicitation of Federal Civilian and nuisance, jeopardy, or violence, or (a) Except as otherwise authorized Uniformed Services Personnel for knowingly or recklessly creating a risk under this section, the following are Contributions to Private Voluntary thereof, such person commits any of the prohibited: Organizations, issued by the U.S. Office following prohibited acts: (1) Possessing a weapon. of Personnel Management under (a) Engages in fighting or threatening, (2) Carrying a weapon. Executive Order 12353, 3 CFR, 1982 (3) Using a weapon. or in violent behavior. Comp., p. 139, as amended. (b) Uses language, an utterance, or (b) This section does not apply to any (b) Personal notices posted on gesture, or engages in a display or act agency or Department of Defense authorized bulletin boards, and in that is obscene, physically threatening component that has received prior compliance with building rules or menacing, or done in a manner that written approval from the Defense governing the use of such authorized is likely to inflict injury or incite an Protective Service to carry, transport, or bulletin boards, advertising to sell or immediate breach of the peace. use a weapon in support of a security or rent property of Pentagon Reservation (c) Makes noise that is unreasonable, law enforcement purpose while on the employees or their immediate families. considering the nature and purpose of Pentagon Reservation. (c) Solicitation of labor organization the actor’s conduct, location, time of membership or dues authorized by the day or night, and other factors that § 234.11 Alcoholic beverages and controlled substances. Department of Defense under the Civil would govern the conduct of a Service Reform Act of 1978. reasonably prudent person under the (a) Alcoholic beverages. The use of alcoholic beverages or the (d) Licensees, or their agents and circumstances. employees, with respect to space (d) Creates or maintains a hazardous possession of an open container of an alcoholic beverage within the Pentagon licensed for their use. or physically offensive condition. (e) Solicitations conducted by Reservation is prohibited unless (e) Impedes or threatens the security organizations composed of civilian authorized by the Director, Washington of persons or property, or which employees of the Department of Defense Headquarters Services, or his designee, disrupts the performance of official or members of the uniformed services or the Heads of the Military Department, duties by Department of Defense among their own members for or their designees. Written notice of employees, or which obstructs the use organizational support or for the benefit such authorizations shall be provided to of areas such as entrances, foyers, of welfare funds for their members, after the Defense Protective Service. lobbies, corridors, concourses, offices, compliance with the requirements of (b) Controlled substances. elevators, stairways, roadways, § 234.4(d). driveways, walkways, or parking lots. The following are prohibited: (1) The delivery of a controlled § 234.14 Posting of materials. § 234.8 Preservation of property. substance, except when distribution is Posting or affixing materials, such as The destruction of, or damage to, made by a Licensed physician or pamphlets, handbills, or fliers on the private property is prohibited. The pharmacist in accordance with Pentagon Reservation is prohibited creation of any hazard to persons or applicable law. For the purposes of this except as provided by § 234.13(b) or things, the throwing of articles of any paragraph, delivery means the actual, when conducted as part of activities kind from or at buildings or persons, attempted, or constructive transfer of a approved by the applicable Building improper disposal of rubbish, and open controlled substance. Management Office under § 234.4(d). fires are prohibited. (2) The possession of a controlled substance, unless such substance was § 234.15 Use of visual recording devices. § 234.9 Explosives. obtained by the possessor directly from, The use of cameras or other visual (a) Using, possessing, storing, or or pursuant to a valid prescription or recording devices in restricted areas or transporting explosives, blasting agents order by, a licensed physician or in internal offices must be approved by or explosive materials is prohibited, pharmacist, or as otherwise allowed by the Department of Defense component except pursuant to the terms and Federal or State law. occupying the space. Photographs for conditions of a permit issued by the (c) Presence on the Pentagon advertising or commercial purposes may applicable Building Management Office. Reservation when under the influence only be taken with the permission of the When permitted, the use, possession, of alcohol, a drug, or a controlled Office of the Assistant to the Secretary storage and transportation shall be in substance to a degree that may endanger of Defense for Public Affairs. 544 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations

§ 234.16 Gambling. (2) The provisions of paragraph (b)(1) penalties imposed. The Department of Gambling in any form, or the of this section shall also apply to an Defense assumes no responsibility for operation of gambling devices, is operator who is or has been legally the payment of any fees or costs related prohibited. This prohibition shall not entitled to use alcohol or another drug. to such removal which may be charged apply to the vending or exchange of (3) Tests. to the owner of the vehicle by the chances by licensed blind operators of (1) At the request or direction of an towing organization. This section may vending facilities for any lottery set authorized person who has probable be supplemented from time to time with forth in a State law and authorized by cause to believe that an operator of a the approval of the Director, the provisions of the Randolph- vehicle within the Pentagon Reservation Washington Headquarters Services, or Sheppard Act (20 U.S.C. 107 et seq.). has violated a provision of paragraph his designee, by the issuance and (b)(1) of this section, the operator shall posting of such parking directives as § 234.17 Vehicles and traffic safety. submit to one or more tests of the blood, may be required, and when so issued (a) Open container of alcoholic breath, saliva, or urine for the purpose and posted such directive shall have the beverage. of determining blood alcohol, drug, and same force and effect as if made a part (1) Each person within a vehicle is controlled substance content. thereof. responsible for complying with the (ii) Refusal by an operator to submit provisions of this section that pertain to to a test is prohibited and may result in § 234.19 Penalties and effect on other carrying an open container. The detention and citation by an authorized laws. operator of a vehicle is the person person. Proof of refusal may be (a) Whoever shall be found guilty of responsible for complying with the admissible in any related judicial willfully violating any rule or regulation provisions of this section that pertain to proceeding. enumerated in this part is subject to the the storage of an open container. (iii) Any test or tests for the presence penalties imposed by Federal law for (2) Carrying or storing a bottle, can, or of alcohol, drugs, and controlled the commission of a Class B other receptacle containing an alcoholic substances shall be determined by and misdemeanor offense. beverage that is open or has been administered at the direction of an (b) Whoever violates any rule or opened, or whose seal is broken, or the authorized person. regulation enumerated in this part is contents of which have been partially (iv) Any test shall be conducted by liable to the United States for a civil removed, within a vehicle on the using accepted scientific methods and penalty of not more than $1,000. Pentagon Reservation is prohibited. equipment of proven accuracy and (c) Nothing in this part shall be (3) This section does not apply to: reliability operated by personnel construed to abrogate any other Federal (i) An open container stored in the certified in its use. laws. trunk of a vehicle or, if a vehicle is not (4) Presumptive levels. Dated: January 3, 1996. equipped with a trunk, to an open (i) The results of chemical or other L.M. Bynum, container stored in some other portion quantitative tests are intended to of the vehicle designed for the storage Alternate OSD Federal Register Officer, supplement the elements of probable Department of Defense. of luggage and not normally occupied cause used as the basis for the arrest of [FR Doc. 96–202 Filed 1–5–96; 8:45 am] by or readily accessible to the operator an operator charged with a violation of or passengers; or this section. If the alcohol concentration BILLING CODE 5000±04±M (ii) An open container stored in the in the operator’s blood or breath at the living quarters of a motor home or time of the testing is less than the camper. alcohol concentration specified in DEPARTMENT OF TRANSPORTATION (4) For the purpose of paragraph paragraph (b)(1)(ii) of this section, this Coast Guard (a)(3)(i) of this section, a utility fact does not give rise to any compartment or glove compartment is presumption that the operator is or is 33 CFR Part 165 deemed to be readily accessible to the not under the influence of alcohol. operator and passengers of a vehicle. (ii) The provisions of paragraph [CGD07±95±073] (b) Operating under the influence of (b)(4)(i) of this section are not intended RIN 2115±AE84 alcohol, drugs, or controlled substances. to limit the introduction of any other (1) Operating or being in actual competent evidence bearing upon the Regulated Navigation Area physical control of a vehicle is question of whether the operator, at the Regulations; Fort Pierce, FL prohibited while: time of the alleged violation, was under AGENCY: (i) Under the influence of alcohol, a the influence of alcohol, a drug or drugs, Coast Guard, DOT. drug or drugs, a controlled substance or or a controlled substance or controlled ACTION: Temporary final rule. controlled substances, or any substances, or any combination thereof. combination thereof, to a degree that SUMMARY: The Coast Guard is renders the operator incapable of safe § 234.18 Enforcement of parking establishing a temporary regulated operation; or regulations. navigation area at the Peter P. Cobb (ii) The alcohol concentration in the Parking regulations for the Pentagon bridge in Fort Pierce, Florida. This operator’s blood or breath is 0.08 gram Reservation shall be enforced in regulated navigation area is needed to or more of alcohol per 100 milliliters of accordance with Department of Defense protect all vessels from a safety hazard blood or 0.08 gram or more of alcohol Administrative Instruction Number 88 2 created by damage to the Peter P. Cobb per 210 liters of breath. Provided, and State law. A vehicle parked in any bridge and associated debris in the however, that if State law that applies location without authorization, or surrounding area. Entry into this zone is to operating a vehicle while under the parked contrary to the directions of prohibited unless authorized by the influence of alcohol establishes more posted signs or markings, shall be Captain of the Port, Miami, Florida. restrictive limits of alcohol subject to removal at the owner’s risk EFFECTIVE DATES: This regulation is concentration in the operator’s blood or and expense, in addition to any effective at 8 p.m. on December 27, 1995 breath, those limits supersede the limits and terminates at 12 p.m. on February specified in this paragraph (b). 2 See footnote 1 to § 234.4(a). 24, 1996. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Rules and Regulations 545

FOR FURTHER INFORMATION CONTACT: Regulatory Evaluation have been completed and are available BMC J.L. Belk, USCG Marine Safety This rule is not a significant for inspection and copying. Office, Miami, Florida at (305) 536– regulatory action under section 3(f) of List of Subjects in 33 CFR Part 165 5693. Executive Order 12866 and does not Harbors, Marine safety, Navigation SUPPLEMENTARY INFORMATION: require an assessment of potential costs and benefits under section 6(a)(3) of that (waters), Reporting and recordkeeping Drafting Information order. It has been exempted from review requirements, Safety measures, Waterways. The drafters of this regulation are by the Office of Management and BMC J.L. Belk, Project Officer, USCG Budget under that order. It is not Regulations Marine Safety Office, and LTJG J. Diaz, significant under the regulatory policies and procedures of the Department of For the reasons set out in the Project Attorney, Seventh Coast Guard preamble the Coast Guard amends 33 District Legal Office. Transportation (DOT) (44 FR 11040; February 26, 1979). The Coast Guard CFR Part 165 as follows: Background and Purpose expects the economic impact of this 1. The authority citation for Part 165 proposal to be so minimal that a full continues to read as follows: At approximately 4 p.m. on November Regulatory Evaluation under paragraph 7, 1995, a vessel collided with the east Authority: 33 U.S.C. 1231; 50 U.S.C. 191; 10e of the regulatory policies and side of the fender system of the Peter P. 33 CFR 1.05–1(g), 6.04–1, 6.04–6, 160.5; and procedures of DOT is unnecessary. 49 CFR 1.46. Cobb Bridge (also known as the South Bridge) on the Indian River South Small Entities 2. A new temporary § 165.T07–073 is Section at Fort Pierce, Florida. The Under the Regulatory Flexibility Act added to read as follows: center section of the east fender system (5 U.S.C. 601 et seq.), the Coast Guard was destroyed leaving the bridge § 165.T07±073 Regulated Navigation Area; must consider whether this proposal Indian River South Section, Peter P. Cobb support piling unprotected. The will have a significant economic impact Bridge, Fort Pierce, FL. concrete pilings of the center section of on a substantial number of small (a) Location: The following area is a the fender system extend into the entities. ‘‘Small entities’’ include channel, creating a safety hazard. regulated navigation area: All waters independently owned and operated under the main bridge span extending Construction crews are replacing the businesses that are not dominant in 100 feet either side of the bridge within fender system which was destroyed. their field and that otherwise qualify as the main channel. A regulated navigation area has been ‘‘small business concerns’’ under established on the Indian River South section 3 of the Small Business Act (15 (b) Regulations: In accordance with Section which includes the area under U.S.C. 632). general regulations in § 165.11 of this the main span of the bridge extending For reasons set forth in the above part, no vessel may operate within the 100 feet either side of the bridge within Regulatory Evaluation, the Coast Guard regulated navigation area contrary to the main channel. This area has the certifies under section 605(b) of the this regulation. All barge traffic must following restrictions and conditions for Regulatory Flexibility Act (5 U.S.C. 601 obtain permission from the Captain of vessel traffic. et seq.) that this rule will not have a the Port or his designated representative prior to transiting. Any barges allowed All barge traffic must obtain significant economic impact on a to transit the zone by the Captain of the permission from the Captain of the Port substantial number of small entities. Port will be required to meet the or his designated representative prior to Collection of Information following conditions: the barge must be transiting. Any barges allowed to transit assisted by two tugs made fast fore and the zone by the Captain of the Port will This rule contains no information collection requirements under the aft; tugs must be of adequate be required to meet the following Paperwork Reduction Act (44 U.S.C. horsepower to fully maneuver the barge; conditions: the barge must be assisted 3501 et seq.). and the zone shall be transited by barge by two tugs made fast fore and aft; tugs traffic at slack water only. All other must be of adequate horsepower to fully Federalism vessel traffic shall stay clear of the maneuver the barge; and the zone shall This action has been analyzed under damaged section of the bridge and be transited by barge traffic at slack the principles and criteria contained in repair work underway. The Captain of water only. All other vessel traffic shall executive order 12612 and has the Port will notify the public of stay clear of the damaged section of the determined that the rulemaking does changes in the status of this zone by bridge and the repair work underway. not have sufficient federalism Marine Safety Radio Broadcast on VHF In accordance with 5 U.S.C. 553, a implications to warrant the preparation Marine Band Radio, Channel 22 (157.1 notice of proposed rulemaking was not of a Federalism Assessment. MHz). published for this regulation and good Environmental Assessment (c) Effective dates: This section is cause exists for making it effective in effective at 8 p.m. on December 27, 1995 less than 30 days after Federal Register The Coast Guard has considered the and terminates at 12 p.m. on February publication. Publication of notice of environmental impact of this action and 24, 1996. proposed rulemaking and delay of has determined pursuant to Section effective date would be contrary to 2.B.2.e(34)(g) of Commandant Dated: December 27, 1995. public interest because immediate Instruction M16475.1B that this action Roger T. Rufe, Jr., action is necessary to prevent vessels is categorically excluded from further Rear Admiral, U.S. Coast Guard, Commander, from colliding with the bridge support environmental documentation. A Seventh Coast Guard District. pilings, causing potential danger to the categorical exclusion checklist and [FR Doc. 96–205 Filed 1–5–96; 8:45 am] public. categorical exclusion determination BILLING CODE 4910±14±M 546

Proposed Rules Federal Register Vol. 61, No. 5

Monday, January 8, 1996

This section of the FEDERAL REGISTER section 4 of the OPM general provisions, part, the President’s memorandum of contains notices to the public of the proposed title IV, of Public Law 104–52. September 12, 1995, entitled ‘‘Career issuance of rules and regulations. The Transition Assistance for Federal Providing Employment Information purpose of these notices is to give interested Employees.’’ persons an opportunity to participate in the Agencies are subject to two statutory In addition to carrying out the rule making prior to the adoption of the final requirements that require public notice obligations discussed above, OPM rules. for competitive examinations and provides employment information to vacancies in the competitive service and support outplacement services provided OFFICE OF PERSONNEL Senior Executive Service. Under both by agency career transition centers. MANAGEMENT laws, OPM is responsible for collecting OPM also responds to a large volume of and disseminating the information. inquiries from the public, Federal 5 CFR Parts 330, 333, and 335 Under 5 U.S.C. 3327, agencies must employees, Congressional offices, and notify OPM of (1) competitive others on a broad range of employment RIN 3206±AH25 examinations and (2) vacancies in the topics. competitive service and Senior Agency Funding for Federal Executive Service for which the agency Funding Job Information Employment Information will consider applicants from outside Previously, Congress provided direct the Federal service. OPM’s funding to OPM to carry out AGENCY: Office of Personnel implementing regulations for the employment information functions. Management. competitive service are in 5 CFR However, during deliberations on ACTION: Proposed rule with request for 330.102 and 333.102 and the Senior OPM’s FY 96 appropriations, Congress comments. Executive Service, in § 317.501(b). concluded that individual agencies Section 3327 requires OPM to make should fund these functions. Congress SUMMARY: The Office of Personnel information available to State reduced OPM’s FY 96 funding of the Management (OPM) is issuing proposed Employment Service offices regarding employment information function to regulations requiring each agency to pay competitive examinations conducted by only 32 percent of what it was in FY 95. a fee for its share of the cost of OPM or agencies under delegated Public Law 104–52 adds the following providing employment information examining authority. It also authorizes new subsection to redesignated 5 U.S.C. through OPM to Federal employees and OPM to issue regulations under which 3330: the public. The regulations implement a agencies shall notify the State ‘‘(f) The Office may, to the extent it permanent statutory provision of Public Employment Service of vacancies for determines appropriate, charge such Law 104–52, which authorizes OPM to which the agency seeks applications fees to agencies for services provided charge fees to agencies to pay the cost from persons outside the Federal under this section and for related of providing Federal employment service. Since 1989, OPM has met these Federal employment information. The information and related services. statutory requirements through regular Office shall retain such fees to pay the DATES: Written comments will be electronic reports of job listings in the costs of providing such services and considered if received on or before Federal Employment Information information.’’ February 7, 1996. System to America’s Job Bank, a These regulations implement the new ADDRESSES: Send or deliver written Department of Labor funded subsection (f). For the future, OPM will comments to Leonard R. Klein, organization that disseminates vacancy establish a working group of the Associate Director for Employment, information to State Employment Interagency Advisory Group, consisting Office of Personnel Management, Room Service offices. Agencies need take no of officials from representative agencies 6F08, 1900 E Street, NW., Washington, further action. and OPM, to review the level, quality DC 20415 (FAX 202–606–5049). Under 5 U.S.C. 3330, agencies must and costs of information services notify OPM of competitive service job provided and make recommendations FOR FURTHER INFORMATION CONTACT: announcements open to applicants for improving efficiency and Richard Whitford on 202–606–2525, outside an agency’s own workforce. effectiveness. All agencies will have the TDD 202–606–0591, or FAX 202–606– OPM is required to make this opportunity, through the Interagency 5049. information available to the public. Advisory Group, to discuss and SUPPLEMENTARY INFORMATION: The (This requirement was previously in 5 comment on recommendations of the Treasury, Postal Service, and General U.S.C. 3329, which was redesignated as working group prior to implementation. Government Appropriations Act, 1996 section 3330 by Public Law 104–52.) OPM will regularly report to agencies (Public Law 104–52, November 19, OPM’s implementing regulations are in the information it collects regarding 1995) shifts the funding for the Federal 5 CFR 335.105. customer satisfaction and complaints. employment information function from Agencies also are required by the OPM also will notify each agency OPM appropriations to a combination of Interagency Career Transition annually of the costs of the services, its OPM appropriations and fees for Assistance Plan for Displaced obligation and of payment procedures. services to be paid by agencies into Employees in 5 CFR part 330 to notify These regulations also consolidate the OPM’s revolving fund. Each subsequent OPM of vacancies open to candidates public notice requirements for year Congress will decide how much outside an agency’s workforce. OPM competitive service positions in parts money to appropriate directly to OPM makes this information available to 330, 333, and 335. OPM will notify for this function. This new financial assist displaced employees in finding agencies directly of the information obligation of agencies is contained in employment. The Plan implemented, in regarding specific announcements to be Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 547 reported. The requirement in parts 330 has been appropriated $2.5 million for because it pertains only to Federal and 333 that individual agencies notify this purpose in FY 96. The balance is agencies. the State Employment Service of $2.8 million, which we propose to Executive Order 12866, Regulatory vacancies is eliminated since OPM charge to agencies as authorized by Pub. Review provides this report on behalf of L. 104–52. agencies. Furthermore, to better serve To determine a fair fee structure, we This rule has been reviewed by the displaced employees and the public, considered all who benefit from this Office of Management and Budget in OPM recently asked agencies to provide service. Clearly we all do. accordance with Executive Order 12866. • electronic files of vacancy The system enables OPM and List of Subjects announcements to OPM. OPM will agencies to meet the public notice make these available directly to job requirements of an open, competitive 5 CFR Part 330 seekers, minimizing the number of merit system as required by law. Armed forces reserves, Government inquiries to agencies, and thus reducing • The system attracts quality employees. personnel office workload. candidates for those agencies that are 5 CFR Parts 333 and 335 Computation of Agency Fees for FY 96 recruiting, and provides a mechanism to assist agencies in achieving a diverse Government employees. The Federal Employment Information workforce. It provides a vital link to System is a dynamic data base of job U.S. Office of Personnel Management. students at colleges and universities, as James B. King, listings and vacancy announcements as well as to counsellors who assist Director. well as general employment information veterans and the disabled. for students, veterans, disabled persons, • The system helps surplus and Accordingly, OPM proposes to amend and others. To minimize the financial displaced employees. The system 5 CFR parts 330, 333, and 335, as impact of the new law on agencies, provides the framework for the career follows: OPM has already reduced or eliminated transition programs that will replace the several services previously provided. Interagency Placement Program. PART 330ÐRECRUITMENT, These included live operator telephone • The system handles over 6.5 SELECTION, AND PLACEMENT service and face-to-face counter service million inquiries a year, inquiries that (GENERAL) at Federal Employment Information would otherwise go to individual Centers, as well as customized 1. The authority citation for part 330 agency personnel offices. responses to written inquiries. Available is revised to read as follows: Because all agencies benefit from this services now include access to three Authority: 5 U.S.C. 1302, 3301, 3302; E.O. service whether or not they are actively automated data bases: 10577, 3 CFR, 1954–58 Comp., p. 218. • the Career America Connection—a recruiting, OPM has proposed to Section 330.102 also issued under 5 U.S.C. nationwide phone system with access agencies that the FY 96 fee for 3327 and 3330. points at OPM Service Centers and the employment information services be Subpart B also issued under 5 U.S.C. 3315 and 8151. OPM Staffing Service Center in Macon, based on each agency’s proportionate share of the Federal competitive service Section 330.401 also issued under 5 U.S.C. GA. 3310. • the Federal Job Opportunities workforce. The employment figures would be taken from OPM’s Central Subpart H also issued under 5 U.S.C. Board—an electronic bulletin board 8337(h) and 8457(b). with access for individuals, career Personnel Data File (CPDF) as of March Subpart I also issued under sec. 4432 of transition centers, and college 31, 1995, and would include all Pub. Law 102–484, 106 Stat 2720, 5 U.S.C. placement offices through modems or permanent and nonpermanent 3301 note. competitive service employees. Internet. 2. Section 330.102 is revised, to read • OPM proposed to include touchscreen computers located in as follows: OPM offices, Federal office buildings, nonpermanent employees because use and other locations. of temporary and term employment has § 330.102 Federal employment Job seekers can read or download job increased as agencies adjust to reduced information. listings, vacancy announcements, and funding levels, and job announcements (a) Vacancies open to the public. application materials, or they can for nonpermanent as well as permanent (1) Notice required. (i) Under 5 U.S.C. request that such materials be mailed or employment must be reported to OPM. 3327, Federal agencies must notify OPM faxed to them. The system is accessible We proposed to count employment as promptly of: to the hearing impaired, and OPM of March 31st because employment on (A) Open competitive examinations; provides large print or Braille versions that date is available in time to allow for (B) Vacancies in the competitive for the visually impaired. OPM also agency planning and budgeting. service to be filled under direct hire provides limited live operator service on After considering comments on this procedures or part 333 of this chapter; its Career America Connection lines into proposal, OPM will issue final and the Macon, GA, Staffing Service Center. regulations. At that time, we will begin (C) Vacancies in the Senior Executive This level of employment information to collect fees for FY 96. Although OPM Service for which the agency seeks is the minimum we must provide to recommends that agencies be billed at applications from persons outside the fulfill our statutory obligations. This the agency level to minimize billing and Federal service. Also, in accordance minimum level of employment accounting, OPM will accommodate with § 317.501(b)(2) of this chapter, information service will cost $5.3 agencies as much as possible, such as agencies must notify OPM of all Senior million in FY 96 in operating and billing at the sub-component level if an Executive Service vacancies to be filled maintenance costs. OPM has already agency prefers. by initial career appointment. borne the costs of developing the system (ii) OPM will provide this information Regulatory Flexibility Act and installing the technology. to the employment offices of the United Congress directed that OPM share the I certify that this regulation will not States Employment Service. operating and maintenance costs have a significant economic impact on (2) Agencies covered. Paragraph (a)(1) necessary to provide this service. OPM a substantial number of small entities of this section applies to: 548 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules

(i) The executive departments listed at OPM will work with agencies to review ACTION: Notice of proposed rulemaking. 5 U.S.C. 101; the effectiveness and efficiency of the (ii) The military departments listed at Federal Employment Information SUMMARY: This notice proposes to 5 U.S.C. 102; System in meeting Federal agency and amend the Class E airspace area at (iii) Government owned corporations pubic needs and identify improvements Hanford, CA. The development of a in the executive branch as described at to the system, consistent with the Global Positioning System (GPS) 5 U.S.C. 103; minimum level of service and statutory Standard Instrument Approach (iv) Independent establishments in requirements. Subsequently, OPM will Procedure (SIAP) to Runway (RWY) 32 the executive branch as described at 5 annually compute the cost of providing has made this proposal necessary. The U.S.C. 104, including the Nuclear employment information and notify intended effect of this proposal is to Regulatory Commission; and each agency of its share, along with a provide adequate controlled airspace for (v) Government Printing Office. full accounting of the costs, and Instrument Flight Rules (IFR) operations (b) All other vacancies. payment procedures. at Hanford Municipal Airport, Hanford, (1) Notice required. Under 5 U.S.C. CA. 3330, OPM must maintain, and make PART 333ÐRECRUITMENT AND DATES: Comments must be received on available to the public, a list of agency SELECTION FOR TEMPORARY AND or before February 15, 1996. vacancy announcements for positions in TERM APPOINTMENTS OUTSIDE THE ADDRESSES: Send comments on the the competitive service. Under REGISTER proposal in triplicate to: Federal § 330.706 of this chapter, agencies must Aviation Administration, Attn: notify OPM of competitive service 3. The authority citation for 333 is revised to read as follows: Manager, System Management Branch, vacancies for which an agency will AWP–530, Docket No. 95–AWP–45, Air accept applications from outside an Authority: 5 U.S.C. 1302, 3301, 3302, 3327, Traffic Division, P.O. Box 92007, agency’s workforce. Therefore, agencies 3330; E.O. 10577, 3 CFR 1954–58 Comp., p. Worldway Postal Center, Los Angeles, must notify OPM promptly of 218; § 333.203 also issued under 5 U.S.C. California 90009. 1104. competitive service vacancies to be The official docket may be examined filled for more than 90 days from among 4. Section 333.102 is revised to read in the Office of the Assistant Chief current career and career-conditional as follows: Counsel, Western Pacific Region, employees, reinstatement eligibles, and/ Federal Aviation Administration, Room or candidates with noncompetitive § 333.102 Notice of job announcements to OPM. 6007, 15000 Aviation Boulevard, appointment eligibility, when the Lawndale, California 90261. agency will accept applications from Under 5 U.S.C. 3327 and 3330, An informal docket may also be individuals outside the agency’s own agencies are required to report job examined during normal business at the work force. announcements to OPM when recruiting Office of the Manager, System (2) Agencies covered. Except for any outside the register. This requirement is Management Branch, Air Traffic executive agency or unit thereof whose implemented through § 330.102 of this Division at the above address. principal function is the conduct of chapter. FOR FURTHER INFORMATION CONTACT: foreign intelligence or Scott Speer, Airspace Specialist, System counterintelligence activities, as PART 335ÐPROMOTION AND INTERNAL PLACEMENT Management Branch, AWP–530, Air determined by the President, paragraph Traffic Division, Western-Pacific (b)(1) of this section applies to: 5. The authority citation for part 335 Region, Federal Aviation (i) The executive departments listed at is revised to read as follows: Administration, 15000 Aviation 5 U.S.C. 101; Boulevard, Lawndale, California 90261, (ii) The military departments listed at Authority: 5 U.S.C. 3301, 3302, 3330; E.O. telephone (310) 725–6533. 5 U.S.C. 102; 10577, 3 CFR 1954–58 Comp., p. 218. (iii) Government corporations in the 6. Section 335.105 is revised to read SUPPLEMENTARY INFORMATION: executive branch as described at 5 as follows: Comments Invited U.S.C. 103; and (iv) Independent establishments in § 335.105 Notice of job announcements to Interested parties are invited to the executive branch as described at 5 OPM. participate in this proposed rulemaking U.S.C. 104. Under 5 U.S.C. 3330, agencies are by submitting such written data, views, (c) Content. Notice to OPM of job required to report job announcements to or arguments as they may desire. announcements must include the OPM. This requirement is implemented Comments that provide the factual basis position title, tenure, location, pay plan through § 330.102 of this chapter. supporting the views and suggestions and grade (or pay rate) of the vacant [FR Doc. 96–214 Filed 1–5–96; 8:45 am] presented are presently helpful in position; application deadline; and developing reasoned regulatory BILLING CODE 6325±01±M other information specified by OPM. In decisions on the proposal. Comments addition, agencies shall provide OPM are specifically invited on the overall with an electronic file of the complete regulatory, aeronautical, economic, DEPARTMENT OF TRANSPORTATION vacancy announcement or recruiting environmental, and energy-related bulletin, which must include the Federal Aviation Administration aspects of the proposal. qualifications required, equal Communications should identify the opportunity provisions and, when 14 CFR Part 71 airspace docket number and be applicable, veterans’ preference submitted in triplicate to the address [Airspace Docket No. 95±AWP±45] provisions. listed above. Commenters wishing the (d) Funding. Under 5 U.S.C. 3330(f), Proposed Amendment of Class E FAA to acknowledge receipt of their OPM is authorized to charge fees to Airspace; Hanford, CA comments on this notice must submit agencies for their share of the cost of with the comments a self-addressed, providing employment information to AGENCY: Federal Aviation stamped postcard on which the the public and to Federal employees. Administration (FAA), DOT. following statement is made: Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 549

‘‘Comments to Airspace Docket No. 95– Regulatory Policies and Procedures (44 SUMMARY: This notice proposes to AWP–45.’’ The postcard will be date/ FR 11034; February 26, 1979); and (3) establish a Class E airspace area at time stamped and returned to the does not warrant preparation of a Hollister, CA. The development of a commenter. All communications Regulatory Evaluation as the anticipated Global Positioning System (GPS) received on or before the specified impact is so minimal. Since this is a Standard Instrument Approach closing date for comments will be routine matter that would only affect air Procedure (SIAP) to Runway (RWY) 31 considered before taking action on the traffic procedures and air navigation, it has made this proposal necessary. The proposed rule. The proposal contained is certified that this proposed rule intended effect of this proposal is to in this notice may be changed in light would not have a significant economic provide adequate controlled airspace for of comments received. All comments impact on a substantial number of small Instrument Flight Rules (IFR) operations submitted will be available for entities under the criteria of the at Hollister Municipal Airport, Hollister, examination in the System Management Regulatory Flexibility Act. CA. Branch, Air Traffic Division, at 15000 DATES: Comments must be received on List of Subjects in 14 CFR Part 71 Aviation Boulevard, Lawndale, or before February 15, 1996. California 90261, both before and after Airspace, Incorporation by reference, ADDRESSES: Send comments on the the closing date for comments. A report Navigation (air). proposal in triplicate to: Federal summarizing each substantive public The Proposed Amendment Aviation Administration, Attn: contact with FAA personnel concerned Manager, System Management Branch, In consideration of the foregoing, the with this rulemaking will be filed in the AWP–530, Docket No. 95–AWP–13, Air Federal Aviation Administration docket. Traffic Division, P.O. Box 92007, proposes to amend 14 CFR part 71 as Worldway Postal Center, Los Angeles, Availability of NPRM follows: California 90009. Any person may obtain a copy of this The official docket may be examined Notice of Proposed Rulemaking (NPRM) PART 71Ð[AMENDED] in the Office of the Assistant Chief by submitting a request to the Federal 1. The authority citation for 14 CFR Counsel, Western Pacific Region, Aviation Administration, System part 71 continues to read as follows: Federal Aviation Administration, Room Management Branch, P.O. Box 92007, 6007, 15000 Aviation Boulevard, Worldway Postal Center, Los Angeles, Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– Lawndale, California 90261. California 90009. Communications must 1963 Comp., p. 389; 14 CFR 11.69. An informal docket may also be identify the notice number of this examined during normal business at the § 71.1 [Amended] NPRM. Persons interested in being Office of the Manager, System placed on a mailing list for future 2. The incorporation by reference in Management Branch, Air Traffic NPRM’s should also request a copy of 14 CFR 71.1 of the Federal Aviation Division at the above address. Advisory Circular No. 11–2A, which Administration Order 7400.9C, Airspace describes the application procedures. FOR FURTHER INFORMATION CONTACT: Designations and Reporting Points, Scott Speer, Airspace Specialist, System The Proposal dated August 17, 1995, and effective Management Branch, AWP–530, Air September 16, 1995, is amended as Traffic Division, Western-Pacific The FAA is considering an follows: amendment to part 71 of the Federal Region, Federal Aviation Aviation Regulations (14 CFR part 71) Paragraph 6005 Class E airspace areas Administration, 15000 Aviation by amending the Class E airspace area extending upward from 700 feet or more Boulevard, Lawndale, California 90261, at Hanford, CA. The development of above the surface of the earth. telephone (310) 725–6533. GPS SIAP at Hanford Municipal Airport * * * * * SUPPLEMENTARY INFORMATION: has made this proposal necessary. The AWP AZ E5 Hanford, CA [Revised] intended effect of this proposal is to Comments Invited Hanford Municipal Airport, CA Interested parties are invited to provide adequate Class E airspace for ° ′ ′′ ° ′ ′′ aircraft executing the GPS RWY 32 SIAP (lat. 36 19 07 N, long. 119 37 44 W) participate in this proposed rulemaking at Hanford Municipal Airport, Hanford, That airspace extending upward from 700 by submitting such written data, views, CA. Class E airspace designations for feet above the surface within a 5-mile radius or arguments as they may desire. of Hanford Municipal Airport. airspace areas extending upward from Comments that provide the factual basis 700 feet or more above the surface of the * * * * * supporting the views and suggestions earth are published in Paragraph 6005 of Issued in Los Angeles, California, on presented are particularly helpful in December 11, 1995. FAA Order 7400.9C dated August 17, developing reasoned regulatory 1995, and effective September 16, 1995, Richard R. Lien, decisions on the proposal. Comments which is incorporated by reference in 14 Manager, Air Traffic Division, Western-Pacific are specifically invited on the overall Region. CFR 71.1. The Class E airspace regulatory, aeronautical, economic, designation listed in this document FR Doc. 96–221 Filed 1–5–96; 8:45 am] environmental, and energy-related would be published subsequently in BILLING CODE 4910±13±M aspects of the proposal. this Order. Communications should identify the The FAA has determined that this airspace docket number and be proposed regulation only involves an 14 CFR Part 71 submitted in triplicate to the address established body of technical [Airspace Docket No. 95±AWP±13] listed above. Commenters wishing the regulations for which frequent and FAA to acknowledge receipt of their routine amendments are necessary to Proposed Establishment of Class E comments on this notice must submit keep from operationally current. Airspace; Hollister, CA with the comments a self-addressed, Therefore, this proposed regulation—(1) AGENCY: Federal Aviation stamped postcard on which the is not a ‘‘significant regulatory action’’ Administration (FAA), DOT. following statement is made: under Executive Order 12866; (2) is not ‘‘Comments to Airspace Docket No. 95– ACTION: Notice of proposed rulemaking. a ‘‘significant rule’’ under DOT AWP–13.’’ The postcard will be date/ 550 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules time stamped and returned to the does not warrant preparation of a 14 CFR Part 71 commenter. All communications Regulatory Evaluation as the anticipated [Airspace Docket No. 95±AWP±44] received on or before the specified impact is so minimal. Since this is a closing date for comments will be routine matter that would only affect air Proposed Amendment of Class E considered before taking action on the traffic procedures and air navigation, it Airspace; Montague, CA proposed rule. The proposal contained is certified that this proposed rule in this notice may be changed in light would not have a significant economic AGENCY: Federal Aviation of comments received. All comments impact on a substantial number of small Administration (FAA), DOT. submitted will be available for entities under the criteria of the ACTION: Notice of proposed rulemaking. examination in the System Management Regulatory Flexibility Act. Branch, Air Traffic Division, at 15000 SUMMARY: This notice proposes to Aviation Boulevard, Lawndale, List of Subjects in 14 CFR Part 71 amend the Class E airspace area at California 90261, both before and after Montague, CA. The intended effect of the closing date for comments. A report Airspace, Incorporation by reference, this proposal is to provide adequate summarizing each substantive public Navigation (air). controlled airspace for Instrument Flight Rules (IFR) operations at Siskiyou contact with FAA personnel concerned The Proposed Amendment with this rulemaking will be filed in the County Airport, Montague, CA. docket. In consideration of the foregoing, the DATES: Comments must be received on or before February 15, 1996. Availability of NPRM Federal Aviation Administration proposes to amend 14 CFR part 71 as ADDRESSES: Send comments on the Any person may obtain a copy of this follows: proposal in triplicate to: Federal Notice of Proposed Rulemaking (NPRM) Aviation Administration, Attn: by submitting a request to the Federal PART 71Ð[AMENDED] Manager, System Management Branch, Aviation Administration, System AWP–530, Docket No. 95–AWP–44, Air Management Branch, P.O. Box 92007, 1. The authority citation for 14 CFR Traffic Division, P.O. Box 92007, Worldway Postal Center, Los Angeles, part 71 continues to read as follows: Worldway Postal Center, Los Angeles, California 90009. Communications must Authority: 49 U.S.C. 106(g), 40103, 40113, California 90009. identify the notice number of this The official docket may be examined NPRM. Persons interested in being 40120; E. O. 10854, 24 FR 9565, 3 CFR, 1959– 1963 Comp., p. 389; 14 CFR 11.69. in the Office of the Assistant Chief placed on a mailing list for future Counsel, Western Pacific Region, NPRM’s should also request a copy of § 71.1 [Amended] Federal Aviation Administration, Room Advisory Circular No. 11–2A, which 6007, 15000 Aviation Boulevard, describes the application procedures. 2. The incorporation by reference in Lawndale, California 90261. The Proposal 14 CFR 71.1 of the Federal Aviation An informal docket may also be Administration Order 7400.9C, Airspace examined during normal business at the The FAA is considering an Designations and Reporting Points, Office of the Manager, System amendment to part 71 of the Federal dated August 17, 1995, and effective Management Branch, Air Traffic Aviation Regulations (14 CFR part 71) to September 16, 1995, is amended as establish a Class E airspace area at Division at the above address. follows: Hollister, CA. The development of FOR FURTHER INFORMATION CONTACT: Scott Speer, Airspace Specialist, System AGPS SIAP at Hollister Municipal Paragraph 6005 Class E airspace areas Airport has made this proposal Management Branch, AWP–530, Air extending upward from 700 feet or more Traffic Division, Western-Pacific necessary. The intended effect of this above the surface of the earth. proposal is to provide adequate Class E Region, Federal Aviation * * * * * airspace for aircraft executing the GPS Administration, 15000 Aviation RWY 31 SIAP at Hollister Municipal AWP CA E5 Hollister, CA [New] Boulevard, Lawndale, California 90261, telephone (310) 725–6533. Airport, Hollister, CA. Class E airspace Hollister Municipal Airport, CA designations for airspace areas (lat. 36°53′36′′ N, long. 121°24′37′′ W) SUPPLEMENTARY INFORMATION: extending upward from 700 feet or more That airspace extending upward from 700 Comments Invited above the surface of the earth are feet above the surface within a 4.2-mile Interested parties are invited to published in Paragraph 6005 of FAA radius of Hollister Municipal Airport and participate in this proposed rulemaking Order 7400.9C dated August 17, 1995, within 2 miles each side of the 142° bearing and effective September 16, 1995, which from the Hollister Municipal Airport by submitting such written data, views, is incorporated by reference in 14 CFR extending from the 4.2-mile radius to 10 or arguments as they may desire. 71.1. The Class E airspace designation miles southeast of the Hollister Municipal Comments that provide the factual basis listed in this document would be Airport. supporting the views and suggestions published subsequently in this Order. presented are particularly helpful in The FAA has determined that this * * * * * developing reasoned regulatory proposed regulation only involves an Issued in Los Angeles, California, on decisions on the proposal. Comments established body of technical December 13, 1995. are specifically invited on the overall regulations for which frequent and Richard R. Lien, regulatory, aeronautical, economic, routine amendments are necessary to Manager, Air Traffic Division, Western-Pacific environmental, and energy-related keep them operationally current. Region. aspects of the proposal. Therefore, this proposed regulation—(1) [FR Doc. 96–222 Filed 1–5–96; 8:45 am] Communications should identify the is not a ‘‘significant regulatory action’’ BILLING CODE 4910±13±M airspace docket number and be under Executive Order 12866; (2) is not submitted in triplicate to the address a ‘‘significant rule’’ under DOT listed above. Commenters wishing the Regulatory Policies and Procedures (44 FAA to acknowledge receipt of their FR 11034; February 26, 1979); and (3) comments on this notice must submit Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 551 with the comments a self-addressed, is not a ‘‘significant regulatory action’’ Issued in Los Angeles, California, on stamped postcard on which the under Executive Order 12866; (2) is not December 11, 1995, following statement is made: a ‘‘significant rule’’ under DOT Richard R. Lien, ‘‘Comments to Airspace Docket No. 95– Regulatory Policies and Procedures (44 Manager, Air Traffic Division, Western-Pacific AWP–44.’’ The postcard will be date/ FR 11034; February 26, 1979); and (3) Region. time stamped and returned to the does not warrant preparation of a [FR Doc. 96–223 Filed 1–5–96; 8:45 am] commenter. All communications Regulatory Evaluation as the anticipated BILLING CODE 4910±13±M received on or before the specified impact is so minimal. Since this is a closing date for comments will be routine matter that would only affect air considered before taking action on the traffic procedures and air navigation, it 14 CFR part 71 proposed rule. The proposal contained is certified that this proposed rule [Airspace Docket No. 95±AEA±14] in this notice may be changed in light would not have a significant economic of comments received. All comments impact on a substantial number of small Proposed Establishment of Class E submitted will be available for entities under the criteria of the Airspace; Richlands, VA examination in the System Management Regulatory Flexibility Act. Branch, Air Traffic Division, at 15000 AGENCY: Federal Aviation Aviation Boulevard, Lawndale, List of Subjects in 14 CFR Part 71 Administration (FAA), DOT. California 90261, both before and after Airspace, Incorporation by reference, ACTION: Notice of proposed rulemaking. the closing date for comments. A report navigation (air). summarizing each substantive public SUMMARY: This proposed rule would contact with FAA personnel concerned The Proposed Amendment establish Class E Airspace at Richlands, with this rulemaking will be filed in the VA. A standard instrument approach docket. In consideration of the foregoing, the procedure (SIAP), based on the Global Federal Aviation Administration Positioning System (GPS), has been Availability of NPRM proposes to amend 14 CFR part 71 as developed for Runway (RWY) 25 at Any person may obtain a copy of this follows: Tazewell County Airport, Richlands, Notice of Proposed Rulemaking (NPRM) VA. The intended effect of this proposal by submitting a request to the Federal PART 71Ð[AMENDED] is to provide adequate controlled Aviation Administration, System airspace for Instrument Flight Rules Management Branch, P.O. Box 92007, 1. The authority citation for 14 CFR (IFR) operations to the airport. The area Worldway Postal Center, Los Angeles, part 71 continues to read as follows: would be depicted on aeronautical California 90009. Communications must Authority: 49 U.S.C. 40103, 40113, 40120; charts for pilot reference. identify the notice number of this E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 DATES: Comments must be received on NPRM. Persons interested in being Comp., p. 389; 49 U.S.C. 106(g); 14 CFR or before March 25, 1996. placed on a mailing list for future 11.69. ADDRESSES: Send comments on the NPRM’s should also request a copy of § 71.1 [Amended] proposed rule in triplicate to: Manager, Advisory Circular No. 11–2A, which System Management Branch, AEA–530, describes the application procedures. 2. The incorporation by reference in Docket No. 95–AEA–14 F.A.A. Eastern The Proposal 14 CFR 71.1 of the Federal Aviation Region, Federal Building #111, John F. Administration Order 7400.9C, Airspace The FAA is considering an Kennedy Int’l Airport, Jamaica, NY Designations and Reporting Points, amendment to part 71 of the Federal 11430. dated August 17, 1995, and effective The official docket may be examined Aviation Regulations (14 CFR part 71) to September 16, 1995, is amended as in the Office of the Assistant Chief amend the Class E airspace area at follows: Counsel, AEA–7, F.A.A. Eastern Region, Montague, CA. The development of a Federal Building #111, John F. Kennedy runway 35 departure procedure at Paragraph 6005 Class E airspace areas International Airport, Jamaica, New Siskiyou County Airport has made this extending upward from 700 feet or more York 11430. proposal necessary. The intended effect above the surface of the earth. An informal docket may also be of this proposal is to provide adequate * * * * * examined during normal business hours Class E airspace for aircraft departing in the System Management Branch, the Siskiyou County Airport, Montague, AWP CA E5 Montague, CA [Revised] AEA–530, F.A.A. Eastern Region, CA. Class E airspace designations for Montague, Siskiyou County Airport, CA Federal Building #111, John F. Kennedy airspace areas extending upward from ° ′ ′′ ° ′ ′′ (lat. 41 46 53 N, long. 122 28 05 W) International Airport, Jamaica, NY 700 feet or more above the surface of the Montague NDB 11430 earth are published in Paragraph 6005 of (lat. 41°43′38′′N, long. 122°28′55′′W) FOR FURTHER INFORMATION CONTACT: Mr. FAA Order 7400.9C dated August 17, That airspace extending upward from 700 Francis T. Jordan, Jr., Airspace 1995, and effective September 16, 1995, feet above the surface within a 6.1-mile which is incorporated by reference in 14 radius of Siskiyou County Airport. That Specialist, System Management Branch, AEA–530, F.A.A. Eastern Region, CFR 71.1. The Class E airspace airspace extending upward from 1,200 feet # designation listed in this document above the surface within 9 miles east and 7 Federal Building 111, John F. Kennedy would be published subsequently in miles west of the 352° bearings from the International Airport, Jamaica, New this Order. Montague NDB, extending from the York 11430; telephone (718) 553–4521. The FAA has determined that this Montague NDB to 32 miles north of the SUPPLEMENTARY INFORMATION: proposed regulation only involves an Montague NDB and within 8.3 miles east and established body of technical 5.2 miles west of the 180° bearing from the Comments Invited regulations for which frequent and Montague NDB, extending from the Interesed parties are invited to routine amendments are necessary to Montague NDB to 16.5 miles south of the participate in this proposed rulemaking keep them operationally current. Montague NDB. by submitting such written data, views, Therefore, this proposed regulation—(1) * * * * * or arguments as they may desire. 552 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules

Comments that provide the factual basis 6005 of FAA Order 7400.9C, dated Issued in Jamaica, New York, on December supporting the views and suggestions August 17, 1995, and effective 15, 1995. presented are particularly helpful in September 16, 1995, which is John S. Walker, developing reasoned regulatory incorporated by reference in 14 CFR Manager, Air Traffic Division. decisions on the proposal. Comments 71.1. The Class E airspace designation [FR Doc. 96–224 Filed 1–5–96; 8:45 am] are specifically invited on the overall listed in this document would be BILLING CODE 4910±13±M regulatory, aeronautical, economic, published subsequently in the Order. environmental, and energy-related The FAA has determined that this aspects of the proposal. proposed regulation only involves an DEPARTMENT OF THE TREASURY Communications should identify the established body of technical airspace docket number and be Internal Revenue Service submitted in triplicate to the address regulations for which frequent and listed above. Commenters wishing the routine amendments are necessary to 26 CFR Part 1 keep them operationally current. FAA to acknowledge receipt of their [EE±148±81] comments on this notice must submit Therefore, this proposed regulation—(1) with those comments a self-addressed, is not a ‘‘significant regulatory action’’ Retirement Bonds stamped postcard on which the under Executive Order 12866; (2) is not following statement is made: a ‘‘significant rule’’ under DOT AGENCY: Internal Revenue Service (IRS), ‘‘Comments to Airspace Docket No. 95– Regulatory Policies and Procedures (44 Treasury. AEA–14’’. The postcard will be date/ FR 11034; February 26, 1979); and (3) ACTION: Withdrawal of proposed time stamped and returned to the does not warrant preparation of a regulations. commenter. regulatory evaluation as the anticipated All communications received before impact is so minimal. Since this is a SUMMARY: This document withdraws the specified closing date for comments routine matter that would only affect air proposed regulations relating to will be considered before taking action traffic procedures and air navigation, it retirement bonds as part of the on the proposed rule. The proposal is certified that this proposed rule President’s Regulatory Reinvention Initiative. contained in this notice may be changed would not have a significant economic in the light of comments received. All impact on a substantial number of small DATES: The proposed regulations are comments submitted will be available entities under the criteria of the withdrawn January 8, 1996. for examination in the Rules Docket Regulatory Flexibility Act. FOR FURTHER INFORMATION CONTACT: both before and after the closing date for Philip Bennet, (202) 622–3926. comments. A report summarizing each List of Subjects in 14 CFR Part 71 SUPPLEMENTARY INFORMATION: substantive public contact with the FAA personnel concerned with this Airspace, Incorporation by reference, Background Navigation (air). rulemaking will be filed in the docket. As part of the President’s Regulatory Availability of NPRMs The Proposed Amendment Reinvention Initiative, the Treasury Department and the IRS identified Any person may obtain a copy of this In consideration of the foregoing, the obsolete regulations that relate to prior Notice of Proposed Rulemaking (NPRM) Federal Aviation Administration law, provide elections for prior years, or by submitting a request to the Office of proposes to amend 14 CFR part 71 as are otherwise outdated due to changes the Assistant Chief Counsel, AEA–7, follows: in the underlying statutory provisions. F.A.A. Eastern Region, Federal Building #111, John F. Kennedy International PART 71Ð[AMENDED] List of Subjects in 26 CFR Part 1 Airport, Jamaica, NY 11430. Income taxes, Reporting and Communications must identify the 1. The authority citation for part 71 recordkeeping requirements. notice number of this NPRM. Persons continues to read as follows: interested in being placed on a mailing Withdrawal of Proposed Amendments Authority: 49 U.S.C. 106(g), 40103, 40113, to the Regulations list for future NPRM’s should also 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– request a copy of Advisory Circular No. 1963 Comp., p. 389; 14 CFR 11.69. Accordingly, under the authority of 11–2A, which describes the application 26 U.S.C. 7805, proposed regulations procedure. 2. The incorporation by reference in § 1.409–1(b)(2)(i) that were published in 14 CFR 71.1 of the Federal Aviation the Federal Register on January 23, The Proposal Administration Order 7400.9C, dated 1984 (49 FR 2794) are withdrawn. The FAA is considering an August 17, 1995, and effective Margaret Milner Richardson, amendment to Part 71 of the Federal September 16, 1995, is proposed to be Commissioner of Internal Revenue. Aviation Regulations (14 CFR part 71) to amended as follows: [FR Doc. 96–165 Filed 1–5–96; 8:45 am] establish Class E airspace extending upward from 700 feet above the surface Paragraph 6005 Class E airspace areas BILLING CODE 4830±01±U at Richlands, VA. A GPS RWY 25 SIAP extending upward from 700 feet or more above the surface of the earth has been developed for Tazewell County Fiscal Service Airport. Additional controlled airspace * * * * * extending upward from 700 feet above AEA VA E5 Richlands, VA 31 CFR Part 256 the surface is needed to accommodate Tazewell County Airport, VA RIN 1510±AA52 this SIAP and for IFR operations at the ° ′ ′′ ° ′ ′′ airport. The area would be depicted on (lat. 37 03 49 N, long. 81 47 54 W) That airspace extending upward from 700 Payments Under Judgments And appropriate aeronautical charts. Class E Private Relief Acts airspace designations for airspace feet above the surface within a 6-mile radius extending upward from 700 feet above of Tazewell County Airport. AGENCY: Financial Management Service, the surface are published in Paragraph * * * * * Fiscal Service, Treasury. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 553

ACTION: Notice of proposed rulemaking. eliminate the $100,000 threshold behalf of the claimants. The GAO distinction for processing a claim. certifies payment on a Certificate of SUMMARY: This action proposes to revise Settlement to the U.S. Treasury Rulemaking Analysis the regulations which govern the Department, Financial Management procedures for payments under It has been determined that this Service (FMS). Judgments and Private Relief Acts. It regulation is not a significant regulatory (b) For persons securing money specifically addresses the procedures for action as defined in Executive Order judgments against the United States in applying for payments, and clarifies the 12866. Accordingly, a regulatory the U.S. district courts, the same payment process. These revisions are assessment is not required. It is hereby procedures as described in paragraph (a) intended to provide greater clarity and certified that this revision will not have of this section apply, except that all of understanding by replacing obsolete a significant economic impact on a the necessary paperwork is forwarded references and unnecessary substantial number of small entities. directly to the GAO by the U.S. requirements with current references Accordingly, a regulatory flexibility Department of Justice. Neither a filing and requirements. analysis is not required. This change nor a request for payment is required will clarify the regulation. DATES: Comments must be submitted on from the claimant securing a judgment. or before February 7, 1996. List of Subjects in 31 CFR Part 256 The GAO verifies that the voucher is proper for payment from the Judgment ADDRESSES: Comments may be Claims, Administrative practices and fund and transmits a certified award to addressed to Charles F. Schwan III, procedures. FMS. Director, Funds Management Division, For the reasons set forth in the (c) Payment is made to the claimant Financial Management Service, Room preamble, 31 CFR part 256 is proposed in accordance with the instructions as 620D, 3700 East-West Highway, to be revised to read as follows: stated in the certified award. Hyattsville, MD 20782 or by FAX to the attention of Charles Schwan on (202) PART 256ÐPAYMENTS UNDER § 256.2 Payment of sums appropriated in 874–8372. JUDGMENTS AND PRIVATE RELIEF private relief acts. ACTS FOR FURTHER INFORMATION CONTACT: Persons entitled to payment of sums Charles F. Schwan III, (202) 874–8380, Sec. appropriated in private relief acts Director, Funds Management Division; 256.1 Judgments against the United States. should make application for payment to or Bernice Mays, (202) 874–8652, 256.2 Payment of sums appropriated in the Credit Accounting Branch, Financial Accountant, Credit Accounting Branch. private relief acts. Management Service, Treasury Authority: 28 U.S.C. 2414; 31 U.S.C. 1304. Department, Hyattsville, MD 20782. SUPPLEMENTARY INFORMATION: Upon receipt of an application, bearing § 256.1 Judgments against the United Background the signature and mailing address of the States. beneficiary, the Credit Accounting The proposed revision will update the (a) Persons securing money judgments Branch will initiate the necessary procedure for making claims. This will against the United States in the U.S. review of the applicable private law and benefit claimants by reducing the Court of Federal Claims are required to will effect payment in accordance with requirements that must be followed in file original transcripts of such the private law. order to receive payment on judgments judgments with the Comptroller General against the United States. This of the U.S. General Accounting Office Dated: November 22, 1995. regulation currently sets a threshold for (GAO) in order to secure payment. In Russell D. Morris, judgment claims greater than $100,000 addition, the U.S. Department of Justice Commissioner. and judgment claims equal to or less submits a voucher for payment with [FR Doc. 96–161 Filed 1–5–96; 8:45 am] than $100,000. The change would supporting documents to the GAO on BILLING CODE 4810±35±U 554

Notices Federal Register Vol. 61, No. 5

Monday, January 8, 1996

This section of the FEDERAL REGISTER SUMMARY: In accordance with section for the 180-square mile study area, contains documents other than rules or 10(a)(2) of Public Law 92–463, The which includes Morrison and Laguna proposed rules that are applicable to the Federal Advisory Committee Act, this Creeks and their tributaries, and the public. Notices of hearings and investigations, announces the forthcoming AFEB flood prone areas associated with the committee meetings, agency decisions and Disease Control Subcommittee Meeting. Beach-Stone Lakes system. Measures rulings, delegations of authority, filing of petitions and applications and agency The meeting will be held from 1130 to will include channel improvements, statements of organization and functions are 1500, Friday, February 9, 1996. The levee raising, and levee reconstruction examples of documents appearing in this purpose of the meeting is to discuss and extension at various locations section. infectious disease issues relevant to the within the study area. Bosnian deployment. The meeting FOR FURTHER INFORMATION CONTACT: location will be Skyline Six, 5109 Questions concerning the proposed DEPARTMENT OF DEFENSE Leesburg Pike, Room 667, Falls Church, action and EIR/EIS should be directed to Virginia 22041–3258. This meeting will Ms. Jane Rinck, Environmental Office of the Secretary be closed to the public in accordance Resources Branch, U.S. Army Corps of with Section 552b(c) of title 5, U.S.C., Engineers, 1325 J Street, Sacramento, Defense Advisory Committee on specifically subparagraph (1) thereof California 95814–2922, telephone (916) Military Personnel Testing and title 5, U.S.C., appendix 1, 557–6715. All persons interested in ACTION: Notice. subsection 10(d). receiving the draft document should FOR FURTHER INFORMATION CONTACT: contact Ms. Trina Farris, telephone Pursuant to Public Law 92–463, COL Vicky Fogelman, AFEB, Executive (916) 557–6777. notice is hereby given that a meeting of Secretary, Armed Forces SUPPLEMENTARY INFORMATION: the Defense Advisory Committee on Epidemiological Board, Skyline Six, Military Personnel Testing is scheduled 5109 Leesburg Pike, Room 667, Falls 1. Project Location: to be held from 8:30 a.m. to 4:30 p.m. Church, Virginia 22041–3258, (703) The project area is located in south on February 1, 1996 and from 8:30 a.m. 681–8012/3. Sacramento County, California, and to 4:30 p.m. on February 2, 1996. The includes a populated area in the meeting will be held at the Hyatt SUPPLEMENTARY INFORMATION: None. southern portion of the City and County Newporter, 1107 Jamboree Road, Juanita H. Maberry, of Sacramento. The study area Newport Beach, California 92660. The Alternate, Army Federal Register Liaison encompasses a 180-square mile drainage purpose of the meeting is to review Officer. basin. The upper part of the basin is planned changes and progress in [FR Doc. 96–190 Filed 1–5–96; 8:45 am] sloped and is drained by Morrison and developing paper-and-pencil and BILLING CODE 3710±08±M Laguna Creeks and their tributaries. computerized enlistment tests, Morrison Creek then flows into the Department of Defense’s Student lower basin, called the Beach-Stone Testing Program, and renorming of the Corps of Engineers Lakes area. Streams with 10-year flows tests. Persons desiring to make oral great enough to qualify for Corps presentations or submit written Intent to Prepare a Joint Draft involvement are Morrison, Elder, statements for consideration at the Environmental Impact Statement (EIS)/ Unionhouse, and Laguna Creeks. Committee meeting must contact Dr. Environmental Impact Report (EIR) for South Sacramento County Streams Jane M. Arabian, Assistant Director, 2. Proposed Action and Alternatives: Investigation, California Accession Policy, Office of the Assistant The Corps and SAFCA, the non- Secretary of Defense (Force Management AGENCY: U.S. Army Corps of Engineers, Federal sponsor, are conducting a Policy), Room 2B271, The Pentagon, Sacramento District, DoD. feasibility investigation to identify and Washington, DC 20301–4000, telephone ACTION: Notice of intent. evaluate alternative measures to provide (703) 697–9271, no later than January additional flood protection to the 20, 1996. The U.S. Army Corps of Engineers southern part of the City and County of Dated: January 3, 1996. (Corps), lead agency under the National Sacramento. L.M. Bynum, Environmental Policy Act, and the The feasibility report and EIS/EIR will Alternate OSD Federal Register Liaison Sacramento Area Flood Control Agency include the alternatives analyzed in the Officer, Department of Defense. (SAFCA), lead agency under the 1994 reconnaissance report and carried [FR Doc. 96–203 Filed 1–5–96; 8:45 am] California Environmental Quality Act, forward for analysis in the feasibility intend to prepare a joint document to BILLING CODE 5000±04±M phase along with any feasible evaluate the environmental effects of alternatives resulting from public proposed flood protection for the scoping and coordination. These Department of the Army southern part of the City and County of alternatives include the no-action Sacramento. The Corps and SAFCA are alternative and the following flood Armed Forces Epidemiological Board working with the City and County of control plans: (1) Nonstructural (AFEB); Closed Meeting Sacramento to jointly provide this measures; (2) channel improvements on protection. AGENCY: Office of The Surgeon General, Morrison, Elder, Unionhouse, and Army, DoD. SUMMARY: This investigation will Laguna Creeks; and (3) levee raising and identify and evaluate potential measures reconstruction on Morrison, Elder, ACTION: Notice of closed meeting. to provide additional flood protection Unionhouse, and Laguna Creeks. The Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices 555 reconnaissance report also considered foot, high-flow diversion channel. The Office of Parks Recreation and Historic upstream detention basins but it was high-flow diversion channel will take Preservation, New York State determined that detention was not an the place of widening and deepening Department of Environmental economically effective means of flood the last 1750 feet of Sauquoit Creek Conservation, New York Governors control. The EIS/EIR will also address prior to its confluence with the Mohawk Office, and Oneida County environmental mitigation and evaluate River, an undeveloped, well vegetated Environmental Management Council. potential restoration and enhancement reach. The diversion channel allows Any interested party is encouraged to opportunities. water and ice, backed up from jams in comment on the supplemental draft EIS the meandering existing channel 3. Environmental Consequences: when a notice of availability is downstream of the project, to flow out published in the Federal Register. The lead agencies have identified of the damage areas. Under non-flood potential environmental effects of the conditions, the diversion would carry b. Significant Issues Requiring In- proposed action in the following areas: no flow and low flows would continue depth Analysis. This office intends to • Aquatic, wetland, and riparian to flow down the exciting Sauquoit develop a draft supplemental habitats. Creek channel. The plan prevents environmental impact statement to • Fish and wildlife populations. damages from fluvial events up to the amend an original statement completed • Esthetics, recreation opportunity and 25-year level and from ice jam events up in June, 1986. This action is needed to use. to the 8-year level. For combined re-assess the impacts resulting from the • Construction-related traffic, air conditions, the level of protection is flood control project in order to comply quality, and noise. estimated to be 5-year. with current federal and state • Water quality. FOR FURTHER INFORMATION CONTACT: regulations and policies. In addition, • Cultural resources. • Project Manager, Joseph Redican current habitat restoration techniques Threatened and endangered species. (ATTN: CENAN–PL–FF) at (212) 264– can be utilized. The EIS/EIR will evaluate the effects 1060 or EIS Coordinator, Karen on these areas and any other potentially Vanderwall (ATTN: CENAN–PL–ES) at 3. Significant Issues significant effects identified in the (212) 264–1275, New York District scoping process. The no-action The Significant issues to be addressed Corps of Engineers, 26 Federal Plaza, include: alternative (no Federal action to New York, NY 10278–0090. improve flood protection) will be the a. Wetland mitigation, SUPPLEMENTARY INFORMATION: baseline for evaluating effects of the b. In-stream and stream bank habitat proposed action and other alternatives. 1. Reasonable Alternatives restoration, 4. Schedule: The draft EIS/EIR is scheduled to be distributed for public Various alternative flood control c. Re-vegetation of stream banks and review and comment in 1997. designs were considered prior to the channel diversion, and development of the original 1986 EIS. John N. Reese, d. Incorporation of bioengineering The preferred design from a flood techniques along stream banks. Col, EN, Commanding. control perspective included widening [FR Doc. 96–182 Filed 1–5–96; 8:45 am] and deepening of the Sauquoit Creek 4. Scoping Meeting BILLING CODE 3710±EZ±M from the Oriskany Boulevard bridge to its confluence with the Mohawk River. Scoping meeting will not be held. Based on environmental concerns Several scoping meetings were held at Corps of Engineers expressed at that time, a design the time of the original environmental Intent to Prepare a Draft Supplemental alternative that reduced environmental assessment for this project and Revised Environmental Impact impacts was chosen. The final significant environmental issues related Statement for a Proposed Sauquoit recommended design includes a high- to the project were identified. The Creek at Whitesboro, New York Flood flow diversion channel in the lowest project design has not been changed, Control Project 3,200 feet of the project running parallel therefore, a scoping meeting will not to Sauquoit Creek. This diversion take place. AGENCY: U.S. Army Corps of Engineers, channel takes the place of modifying New York District. high quality stream habitat that exists in 5. Estimated Date of Statement ACTION: Notice of Intent. the lower reaches of the project area. Availability

SUMMARY: Description of Proposed 2. Scoping Process February 5, 1996. Action. The New York District office of a. Public Involvement. A full scale Juanita H. Maberry, the Corps of Engineers proposes to scoping process was conducted for the Alternate, Army Federal Register Liaison provide flood protection for the town of original EIS including 3 coordination Officer. Whitestown through modification of meetings with local agencies and a town [FR Doc. 96–191 Filed 1–5–96; 8:45 am] Sauquoit Creek and construction of a meeting attended by 150 people. A BILLING CODE 3710±06±M high-flow diversion channel. The Corps notice of intent and the draft EIS were has identified a history of frequent and filed in the Federal Register after which serious flooding along the Sauquoit comments were received from the Creek in the town of Whitestown. The following agencies: U.S. Fish and flooding is caused by both fluvial and Wildlife Service, National Oceanic and ice-jam related events. The project Atmospheric Administration, U.S. Soil extends from the entrance ramp to 5A Conservation Service, U.S. to the confluence of Sauquoit Creek Environmental Protection Agency, U.S. with the Mohawk River. The total length Department of Housing and Urban of the channel modification is Development, Advisory Council On approximately 1 mile ending in a 3,200- Historic Preservation, New York State 556 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices

DEPARTMENT OF ENERGY Commission’s Regulations, 18 CFR Part FEDERAL RESERVE SYSTEM 380 (Order No. 486, 52 FR 47910), the Federal Energy Regulatory Office of Hydropower Licensing (OHL) First Financial Bancorp, et al.; Commission reviewed an application for dredging on Formations of; Acquisitions by; and Mergers of Bank Holding Companies [Project No. 2315±002, South Carolina; the Lake of the Ozarks at the Osage Project Nos. 2332±003 and 2331±002, North Project. The applicant proposes to The companies listed in this notice Carolina and South Carolina] excavate approximately 1,900 cubic have applied for the Board’s approval yards of material for a boat ramp, a boat under section 3 of the Bank Holding South Carolina Electric and Gas turn-around area, and a boat access Company Act (12 U.S.C. 1842) and § Company and Duke Power Company; channel. The applicant also proposes to 225.14 of the Board’s Regulation Y (12 Notice of Availability of Environmental construct a small protective berm CFR 225.14) to become a bank holding Assessment around the lakeward edge of the company or to acquire a bank or bank excavation sites. The excavation will holding company. The factors that are January 2, 1996. occur on project lands and waters in In accordance with the National considered in acting on the applications Morgan County, Missouri. The primary are set forth in section 3(c) of the Act Environmental Policy Act of 1969 and purpose of the excavation activity is to the Federal Energy Regulatory (12 U.S.C. 1842(c)). provide boat access to project waters for Each application is available for Commission’s (Commission’s) private recreational use. The staff immediate inspection at the Federal Regulations, 18 CFR Part 380 (Order No. prepared an Environmental Assessment Reserve Bank indicated. Once the 486, 52 F.R. 47897), the Office of (EA) for the action. In the EA, staff application has been accepted for Hydropower Licensing has reviewed the concludes that approval of the non- processing, it will also be available for applications for new licenses for the project use of project lands would not inspection at the offices of the Board of following three existing hydroelectric constitute a major federal action Governors. Interested persons may Projects, all of which are located on the significantly affecting the quality of the express their views in writing to the Broad River in South Carolina: (1) The human environment. Reserve Bank or to the offices of the Neal Shoals Project (No. 2315–002), Copies of the EA are available for Board of Governors. Any comment on located in Chester and Union Counties, review in the Public Reference Room, an application that requests a hearing near Carlisle, SC; (2) the Ninety-Nine Room 2A, of the Commission’s offices at must include a statement of why a Islands Project (No. 2331–002), located 888 First Street NE., Washington, DC written presentation would not suffice in Cherokee County near Gaffney, SC; 20426. in lieu of a hearing, identifying and (3) the Gaston Shoals Project (No. Lois D. Cashell, specifically any questions of fact that 2332–003), located in Cherokee County, Secretary. are in dispute and summarizing the South Carolina and Cleveland County, evidence that would be presented at a North Carolina near Gaffney, SC. The [FR Doc. 96–194 Filed 1–5–96; 8:45 am] BILLING CODE 6717±01±M hearing. Commission has prepared a final Unless otherwise noted, comments Multiple Project Environmental regarding each of these applications Assessment (EA) covering all three [Docket No. ER96±72±000] must be received not later than February projects. The final EA contains the 1, 1996. Commission staff’s analysis of the PacifiCorp; Notice of Filing A. Federal Reserve Bank of Cleveland existing and potential future (John J. Wixted, Jr., Vice President) 1455 environmental impacts of the projects January 2, 1996. East Sixth Street, Cleveland, Ohio and has concluded that licensing the Take notice that on November 30, 44101: projects, with appropriate 1995, PacifiCorp tendered for filing an 1. First Financial Bancorp, Hamilton, environmental protective or amendment to its filing in this docket. Ohio; to merge with F&M Bancorp, enhancement measures, would not Any person desiring to be heard or to Rochester, Indiana, and thereby constitute a major federal action that protest said filing should file a motion indirectly acquire Farmers & Merchants would significantly affect the quality of to intervene or protest with the Federal Bank, Rochester, Indiana. the human environment. Energy Regulatory Commission, 888 2. FirstMerit Corporation, Akron, Copies of the EA are available for First Street NE., Washington, DC 20426, Ohio; to acquire 100 percent of the review in the Public Reference Room, in accordance with Rules 211 and 214 voting shares of FirstMerit Trust Room 2A, of the Commission’s offices at of the Commission’s Rules of Practice Company, N.A., Naples, Florida. 888 First Street NE., Washington, DC and Procedure (18 CFR 385.211 and 18 B. Federal Reserve Bank of Kansas 20426. CFR 385.214). All such motions or City (John E. Yorke, Senior Vice Lois D. Cashell, protests should be filed on or before President) 925 Grand Avenue, Kansas City, Missouri 64198: Secretary. January 10, 1996. Protests will be considered by the Commission in 1. LJT, Inc., Holdrege, Nebraska; to [FR Doc. 96–195 Filed 1–5–96; 8:45 am] acquire .20 percent of the voting shares BILLING CODE 6717±01±M determining the appropriate action to be taken, but will not serve to make of First Holdrege Bancshares, Inc., protestants parties to the proceeding. Holdrege, Nebraska, and thereby [Project No. 459±073 Missouri] Any person wishing to become a party indirectly acquire shares of First must file a motion to intervene. Copies National Bank of Holdrege, Holdrege, Union Electric Company; Notice of of this filing are on file with the Nebraska. C. Federal Reserve Bank of San Availability of Environmental Commission and are available for public Francisco (Kenneth R. Binning, Assessment inspection. Director, Bank Holding Company) 101 January 2, 1996. Lois D. Cashell, Market Street, San Francisco, California In accordance with the National Secretary. 94105: Environmental Policy Act of 1969 and [FR Doc. 96–193 Filed 1–5–96; 8:45 am] 1. California Community Bancshares the Federal Energy Regulatory BILLING CODE 6717±01±M Corporation, Vacaville, California; to Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices 557 become a bank holding company by Vice President) 701 East Byrd Street, Charleston Boulevard; and (3) no action acquiring Continental Pacific Bank, Richmond, Virginia 23261: or continued use of the existing Federal Vacaville, California. Comments on this 1. First Union Corporation, Charlotte, buildings and U.S. Courthouse. application must be received by January North Carolina; to acquire Society First GSA invites interested individuals, 22, 1996. Federal Savings Bank, Fort Myers, organizations, and Federal, State and Board of Governors of the Federal Reserve Florida, and thereby engage in operating local agencies to participate in defining System, January 2, 1996. a savings association, pursuant to § the reasonable alternatives to be Jennifer J. Johnson, 225.25(b)(9) of the Board’s Regulation Y. evaluated in the EIS and in identifying B. Federal Reserve Bank of Atlanta Deputy Secretary of the Board. any significant social, economic, or (Zane R. Kelley, Vice President) 104 environmental issues related to the [FR Doc. 96–185 Filed 1–5–96; 8:45 am] Marietta Street, N.W., Atlanta, Georgia alternatives. Scoping will be BILLING CODE 6210±01±F 30303: accomplished by correspondence and 1. Pinellas Bancshares Corporation, through a public meeting. The meeting St. Petersburg, Florida; to acquire First Union Corporation, et al.; is scheduled for Thursday, January 11, Eickhoff, Pieper & Willoughby, Inc., 1996, from 4 p.m. to 7 p.m., at the Clark Acquisitions of Companies Engaged in Tampa, Florida, and thereby engage in Permissible Nonbanking Activities County Regional Center, 505 South providing investment or financial Grand Central Parkway, Pueblo Room The organizations listed in this notice advice, pursuant to § 225.25(b)(4)(iii) of (1st Floor), Las Vegas, Nevada. have applied under § 225.23(a)(2) or (f) the Board’s Regulation Y. Comments received during the meeting of the Board’s Regulation Y (12 CFR Board of Governors of the Federal Reserve will be made a part of the administrative 225.23(a)(2) or (f)) for the Board’s System, January 2, 1996. record for the EIS and will be evaluated approval under section 4(c)(8) of the Jennifer J. Johnson, as part of the scoping process. Bank Holding Company Act (12 U.S.C. Deputy Secretary of the Board. Written comments on the scope of 1843(c)(8)) and § 225.21(a) of Regulation [FR Doc. 96–186 Filed 1–5–96; 8:45 am] alternatives and potential impacts may Y (12 CFR 225.21(a)) to acquire or BILLING CODE 6210±01±F be addressed to Mr. John Garvey, GSA control voting securities or assets of a Portfolio Management (9PT), Public company engaged in a nonbanking Buildings Service, 525 Market Street, activity that is listed in § 225.25 of GENERAL SERVICES San Francisco, California 94105. Regulation Y as closely related to ADMINISTRATION Comments should be sent to GSA by banking and permissible for bank January 22, 1996. holding companies. Unless otherwise Public Buildings Service A Draft EIS will be prepared based noted, such activities will be conducted upon the scoping efforts. After its throughout the United States. Notice of Intent To Prepare an publication, the Draft EIS will be Each application is available for Environmental Impact Statement for a available for public and agency review immediate inspection at the Federal Proposed U.S. Courthouse and Federal and comment. A final EIS will be Reserve Bank indicated. Once the Building in Las Vegas, NV prepared that addresses the comments application has been accepted for on the Draft EIS. Pursuant to the Council of processing, it will also be available for If a sign language interpreter, assistive Environmental Quality Regulations (40 inspection at the offices of the Board of listening device, or aids for a visual Code of Federal Regulations 1500–1508) Governors. Interested persons may impairment are required please implementing procedural provisions of express their views in writing on the telephone Mr. John Garvey at (415) 744– the National Environmental Policy Act question whether consummation of the 8113 within five days of the meeting. proposal can ‘‘reasonably be expected to (NEPA), the General Services Dated: December 27, 1995. produce benefits to the public, such as Administration (GSA) hereby gives greater convenience, increased notice that an Environmental Impact Aki K. Nakao, competition, or gains in efficiency, that Statement (EIS) shall be prepared for the Deputy Regional Administrator (9A). outweigh possible adverse effects, such construction of a new 415,000-gross- [FR Doc. 96–183 Filed 1–5–96; 8:45 am] as undue concentration of resources, square foot Federal Building-U.S. BILLING CODE 6820±23±M decreased or unfair competition, Courthouse (FB–CT) to be located conflicts of interests, or unsound within the Central Business Area (CBA) banking practices.’’ Any request for a of the city of Las Vegas, Nevada. The DEPARTMENT OF HEALTH AND hearing on this question must be proposed site encompasses about 6 HUMAN SERVICES accompanied by a statement of the acres and is owned by the city of Las reasons a written presentation would Vegas. The proposed site is bounded by Food and Drug Administration not suffice in lieu of a hearing, Bridger Avenue on the north, Clark Program Announcement Number FDA± identifying specifically any questions of Avenue on the south, Las Vegas CFSAN±96.1 Cooperative Agreement fact that are in dispute, summarizing the Boulevard on the west, and 6th Street for Shellfish and Seafood Safety evidence that would be presented at a on the east. The EIS shall examine three Assistance Project; Availability of hearing, and indicating how the party project alternatives. Specific alternatives Funds for Fiscal Year 1996 commenting would be aggrieved by to be evaluated shall include: (1) approval of the proposal. construction of the FB–CT on the 3.5- AGENCY: Food and Drug Administration, Unless otherwise noted, comments acre Fifth Street School site, a property HHS. regarding each of these applications listed on the National Register of ACTION: Notice. must be received at the Reserve Bank Historic Places located at 400 Las Vegas indicated for the application or the Boulevard; (2) construction of the FB– SUMMARY: The Food and Drug offices of the Board of Governors not CT on an 8.3-acre portion of the county- Administration (FDA), Center for Food later than January 22, 1996. owned railroad yard at the end of Safety and Applied Nutrition (CFSAN), A. Federal Reserve Bank of Bonneville Street between Main Street, Office of Seafood (OS), is announcing its Richmond (Lloyd W. Bostian, Jr., Senior Interstate 15, U.S. Highway 95 and intention to award, noncompetitively, a 558 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices cooperative agreement to the Interstate additional 4 years of support will be 2. Coordination of FDA/State/NMFS Shellfish Sanitation Conference (ISSC) available, depending upon fiscal year efforts to develop a marine biotoxin in the amount of $150,000 for the first appropriations, continued support from dockside testing program; year. An additional 4 years of support other government agencies, and 3. Co-sponsoring of the 1994 Vibrio are available, depending upon the successful performance. It is anticipated vulnificus workshop; availability of Federal funds and that this cooperative agreement will 4. Compilation of a comprehensive successful performance. This effort, commence on or before March 1, 1996. collection of V. vulnificus reference authorized by the Public Health Service materials for use by the ISSC; Act, will enhance FDA’s molluscan III. Background 5. Negotiation and adoption of a V. shellfish sanitation program and Molluscan shellfish have been vulnificus water temperature/time to provide the public greater assurance of identified as the source of a majority of temperature control matrix for reducing the quality and safety of these products. seafood-borne illnesses and have the risk of V. vulnificus illness; FOR FURTHER INFORMATION CONTACT: become a subject of congressional, 6. Dissemination of FDA warnings/ Robert L. Robins, Office of Facilities, industry, and public concern. FDA has information to States/industry; Acquisitions, and Central Services therefore given high priority to efforts to 7. Administration of the National (HFA–522), Food and Drug enhance the agency program and to Indicator Study; Administration, Park Bldg., rm. 340, 8. Development of a model shellfish provide the public greater assurance of 5600 Fishers Lane, Rockville, MD code; the quality and safety of these products. 20857, 301–443–6170. 9. Development of a formal process Unique problems associated with the Regarding the programmatic aspects for establishing binding interpretations consumption of raw molluscan of this program contact: Paul W. of the NSSP Manual of Operations; DiStefano, Office of Seafood, Center for shellfish, e.g., oysters, clams, mussels, 10. Coordination of the development Food Safety and Applied Nutrition and scallops, led to establishment of the of a Shellfish Information Management (HFS–417), 200 C St. SW., Washington, NSSP in 1925. FDA administers the System (SIMS); and DC 20204, 202–418–3177. NSSP and the Manuals of Operation, 11. Participation in regional shellfish parts I and II, which serve as guidance SUPPLEMENTARY INFORMATION: This meetings to coordinate national efforts for State shellfish sanitation programs project is authorized under section 301 in shellfish sanitation. and State regulations. of the Public Health Service Act (42 IV. Purpose U.S.C. 241). This activity is generally In 1983, the ISSC was formed to described in the Catalog of Federal provide a formal structure wherein State The ISSC was formed as a partnership Domestic Assistance at 93.103. This regulatory authorities can establish of State shellfish control officials application is not subject to review as updated guidelines and procedures for representing both environmental and governed by Executive Order 12372, the uniform application of that guidance public health agencies; Federal agencies Intergovernmental Review of Federal for the sanitary control of the shellfish including FDA, the Environmental Programs (45 CFR part 100). industry. The ISSC is a voluntary Protection Agency, and the Department This project will enhance both the organization and is open to all persons of Commerce, National Marine Fisheries effectiveness and uniformity of the interested in fostering controls that will Service; and representatives from molluscan shellfish program by: (1) ensure sources of safe and sanitary industry, academia, and foreign Improving the flow of information shellfish. In 1984, FDA recognized the governments and industry. More than between Federal and State regulatory ISSC through a memorandum of 25 States are members of the ISSC, agencies, industry, and the consumer; understanding and continues to including all 23 coastal shellfish- and (2) strengthening State activities by recognize it as the primary voluntary producing States. providing assistance in such areas as national organization of State shellfish The proposed cooperative agreement procedural and policy guidance, regulatory officials that will provide with ISSC will continue to: (1) Address technical training, research, consumer guidance and counsel to the States on the need to improve information education, and the assurance of matters of sanitary control of shellfish. exchange and transfer among States, conformity to the National Shellfish In 1993, FDA awarded a Federal agencies, industry, and Sanitation Program (NSSP). noncompetitive cooperative agreement consumers; and (2) strengthen State activities by providing them with I. Restricted Eligibility to ISSC for 1 year and provided support for an additional 2 years because of procedural and policy guidance, The Commissioner of the Food and satisfactory performance. The technical training, research, and Drug Administration, as authorized by cooperative agreement expires on consumer education. the Public Health Service Grants February 28, 1996. FDA received Administration Manual, Part 144.3, has V. Substantive Involvement by the FDA $75,000 a year from the Department of determined that this program should be To achieve the purpose of this project, Commerce, National Oceanic and awarded as a cooperative agreement ISSC shall be responsible for conducting Atmospheric Administration, National without competition to the ISSC. Only the following activities: Marine Fisheries Services (NMFS) in the ISSC has the established 1. Interact with States in resolving support of the cooperative agreement. relationships with the necessary State problems between States or between Combined with the NMFS funds, the and local governments, the shellfish FDA and a State regarding conformity to ISSC cooperative agreement was funded industry, other Federal agencies, and the NSSP; for $165,000 the first year and $150,000 FDA to achieve the objective of this 2. Communicate procedures and each for the second and third years, for project. Therefore, no other applications policy statements to guide States in a total of $465,000. Substantive are solicited or will be accepted. executing the NSSP; accomplishments over the first 3 years 3. Interact with States in developing II. Availability of Funds of the cooperative agreement include: uniform and effective evaluation FDA will fund this cooperative 1. Mediation of differences between criteria; agreement at a level of approximately FDA and States regarding compliance 4. Provide program auxiliary support $150,000 for the first year. An with the NSSP Manuals of Operation; in facilitating State involvement in Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices 559 technical training, research, consumer 4. The application adequately DEPARTMENT OF HOUSING AND education, coordinating the collection of describes how ISSC will maintain and URBAN DEVELOPMENT data and maintaining the National coordinate the collection of data to keep Shellfish Register of Classified Estuarine the National Shellfish Register for Office of the Assistant Secretary for Waters, and coordinating the Classified Estuarine Waters up-to-date. Policy Development and Research development of a digitized mapping The application also describes how [Docket No. FR±3960±N±02] network (SIMS); ISSC will coordinate the development of 5. Interact with States to implement a digitized mapping network. Notice of Cancellation of Bidders V. vulnificus consumer educational Conference on Cooperative Agreement In addition, the agency will determine programs, develop risk reduction Applications for the Community whether the estimated cost of the project controls for V. vulnificus, and develop Renaissance Fellows Program criteria for assessing V. vulnificus risk is reasonable. The application shall reduction controls; and include a detailed budget that shows: (1) AGENCY: Office of the Assistant 6. Obtain information from States and Anticipated costs for personnel, travel, Secretary for Policy Development and industry to provide consistent and communications and postage, Research, HUD. coordinated input to FDA and equipment, and supplies; and (2) the ACTION: Notice of Cancellation of implement a Model Shellfish Code. sources of funds to meet those needs. Bidders Conference on Cooperative FDA will monitor and evaluate the Agreement Applications for the VII. Reporting Requirements ISSC’s conduct under this cooperative Community Renaissance Fellows agreement. FDA will take any actions FDA requires an annual Financial Program. that may be necessary to ensure Status Report (FSR) (SF–269). Under compliance with this cooperative SUMMARY: On November 30, 1995, HUD FDA procedures, the original and two published a notice in the Federal agreement. Future support under this copies of this report must be submitted agreement will be contingent upon Register seeking applications from to FDA’s Grants Management Office public and private universities in order satisfactory performance of this project within 90 days of the budget period and the availability of Federal fiscal to provide funding to develop and expiration date. An annual project year appropriations. implement the educational component progress report is also required. The of HUD’s new Community Renaissance VI. Review Procedure and Evaluation contents of this report shall be suggested Fellows Program. The notice also Criteria by the project officer at a later date. announced that HUD would hold a A. Review Procedure A final project progress report, FSR, ‘‘bidders’’ conference in Washington and Invention Statement must be D.C. on January 11, 1996. The application submitted by the The purpose of this notice is to ISSC will undergo dual peer review. submitted within 90 days from the expiration date of the project period as announce the cancellation of the The application will be reviewed for January 11, 1996 conference due to the noted on the Notice of Grant Award. scientific and technical merit by a panel partial shutdown of the Federal of experts based upon the applicable Program monitoring will be government. The conference may be evaluation criteria. If the application is conducted on an ongoing basis, and rescheduled. No other changes are made recommended for approval, it will then written reports may be done by the to the November 30, 1995 notice by this be presented to the National Advisory project officer. Monitoring may be in the notice. Council for their concurrence. form of telephone conversations DATES: The application deadline of B. Evaluation Criteria between the project officer/grants February 15, 1996, as set forth in the management specialist and the principal November 30, 1995 Federal Register The application will be reviewed and investigator, and site visits may be made notice (60 FR 61634) remains evaluated according to the following by either program or grants management unchanged at this time. criteria: staff. The results of the visits will be 1. The application clearly states an FOR FURTHER INFORMATION CONTACT: recorded in the official grant file and understanding of the purpose and Marcia Feld, Office of University objectives of the cooperative agreement may be available to the grantee upon Partnerships in the Office of Policy in the overall seafood safety program; request. Development and Research, U.S. Department of Housing and Urban the key role and responsibility of the VIII. Mechanism of Support ISSC; and the steps, with a proposed Development, 451 7th Street, S.W., schedule, for planning, implementing, Support for this project will be in the Room 8110, Washington, DC 20410. and accomplishing the activities to be form of a cooperative agreement. This Telephone number (202) 708–3061, ext. carried out under this project. agreement will be subject to all policies 262, voice (this is not a toll free 2. The application describes the and requirements that govern the number); 1–800–877–TDDY (TDD). Ms. applicant’s ability to perform the Feld can also be contacted via the research grant programs of the Public l l responsibilities under this project by Health Service, including provisions of Internet at Marcia M. [email protected]. providing qualified staff. The 42 CFR part 52 and 45 CFR part 74. SUPPLEMENTARY INFORMATION: application also demonstrates that the ISSC has the financial and other Dated: December 28, 1995. Background resources required for this project. William B. Schultz, On November 30, 1995 (60 FR 61634), 3. The application specifies the Deputy Commissioner for Policy. HUD published a notice in the Federal intended approach that ISSC will use to [FR Doc. 96–229 Filed 1–5–96; 8:45 am] Register seeking applications from maintain and to continue working with BILLING CODE 4160±01±F public and private universities in order both the States and industry to ensure to provide funding to develop and the exchange of information among the implement the educational component States, industry, and consumers on of HUD’s new Community Renaissance seafood safety. Fellows Program. The program will 560 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices place 20 Fellows in distressed public Register on September 29, 1995 (60 FR announcing up to $2.5 million of FY housing developments undergoing 50700). Extensions of the original 1995 funding for HBCUs to establish conversion, for example, to mixed- application deadline for these Community Development Corporations income or mixed-use projects. HUD competitions were published in the and one announcing up to $1.5 million hopes, with the assistance of private Federal Register on November 8, 1995 of FY 1995 funding for HBCUs to foundations, to place additional Fellows (60 FR 56348). The deadlines are undertake jointly funded construction/ in comparable projects being extended again by this notice to January reconstruction projects with units of undertaken by community development 26, 1996. general local government. The corporations. DATES: No applications will be accepted application due dates were given as The November 30, 1995 notice also after 4:30 p.m. on January 26, 1996. This November 28, 1995. That date was announced that HUD would hold a application deadline is firm as to date extended to January 11, 1996 for the ‘‘bidders’’ conference on January 11, and hour. In the interest of fairness to CDC competition and to January 12, 1996. The purpose of this conference all competing applicants, the 1996 for the joint local government was to explain, in more detail, the Department will treat as ineligible for competition. Since the HUD Fiscal Year background behind this solicitation and consideration any application that is 1996 appropriations bill has not been clarify application requirements. received after the deadline. Applicants signed, resulting in a disruption of HUD operations, the deadline is again Cancellation of Bidders Conference should take this practice into account and make early submission of their extended. In order to provide more time Because of the partial shutdown of the materials to avoid any risk of loss of for the preparation of applications and Federal government, the ‘‘bidders’’ eligibility brought about by for technical assistance from HUD’s conference scheduled for January 11, unanticipated delays or other delivery- HBCU staff, this deadline extends the 1996 in Washington, D.C. is canceled. It related problems. Applications may not application due date to January 26, 1996 may be rescheduled. be submitted by facsimile (FAX). for both competitions. No Other Changes to the November 30, ADDRESSES: FOR AN APPLICATION KIT, Dated: January 2, 1996. 1995 Notice CONTACT: Processing and Control Andrew Cuomo, Branch, Office of Community Planning No other changes are made to the Assistant Secretary Community Planning and and Development, Department of November 30, 1995 notice by this Development Housing and Urban Development, 451 supplementary notice. [FR Doc. 96–267 Filed 1–4–96; 12:02 pm] 7th Street SW., Room 7251, Washington, BILLING CODE 4210±29±P Dated: January 3, 1996. DC 20410–3500. ATTN: HBCU Program. Michael A. Stegman, Requests must be in writing and may be Assistant Secretary for Policy Development sent to this address or may be made by NATIONAL ARCHIVES AND RECORDS and Research. facsimile machine to the following ADMINISTRATION [FR Doc. 96–232 Filed 1–5–96; 8:45 am] number: 202–708–3363. The toll-free BILLING CODE 4210±62±P TDD number for the hearing impaired is Public Meeting With Interested 1–800–877–8339. When requesting an Vendors for Ordering Reproductions of application kit, please refer to document Still Photographs, Aerial Film, Maps, Office of the Assistant Secretary for FR–3937 (for the CDC competition) or and Drawings Community Planning and FR–3945 (for the Local Government Development competition). They may be requested AGENCY: National Archives and Records Administration (NARA). [Docket No. FR±3937±N±03 and No. FR± together. ACTION 3945±N±03] APPLICATION SUBMISSION: An original and : Notice of meeting. three copies of the completed SUMMARY: NARA will hold a meeting to Notice of Extension of Due Date for application must be submitted to the discuss the continued privatization of Notice of Funding Availability for FY following address: Processing and reproduction services for still pictures, 1995 Historically Black Colleges and Control Branch, Office of Community aerial film, maps, and drawings. On Universities Program To Establish Planning and Development, Department March 6, 1995, NARA began a test phase Community Development Corporations of Housing and Urban Development, of new procedures for the delivery of and Projects With Units of General 451 7th Street SW., Room 7251, reproduction services for records which Local Government Washington, DC 20410–3500. Attention: NARA customers request from the Still HBCU Program. If application is made AGENCY: Office of the Assistant Picture Branch (NNSP), the to both competitions, separate sets of Secretary for Community Planning and Cartographic and Architectural Branch applications must be submitted clearly Development, HUD. (NNSC), and the Nixon Presidential indicating which competition. ACTION: Notice of Extension of Due Date Materials Staff (NLNP). NARA FOR FURTHER INFORMATION, CONTACT: The announced in Notice of Funding permitted vendors to set up work Historically Black Colleges and Availability (NOFA) for Fiscal Year (FY) stations in College Park, MD, where the Universities staff in the Office of 1995. still photographs and cartographic and Community Planning and Development: architectural records are housed and SUMMARY: This notice extends to January Yvette Aidara at 202–401–7912 or made available. The three units referred 26, 1996 the application due date for Delores Pruden at 202–401–6362. customer requests for reproduction of two FY 1995 Historically Black Colleges (These are not toll-free numbers.) The these media to the vendors, who and Universities (HBCU) Program toll-free TDD number for the hearing determined fees, collected payments, competitions: (1) To establish impaired is 1–800–877–8339. The performed the copying work, and Community Development Corporations address is: 451 7th Street SW., Room mailed the reproductions to the (CDCs) on HBCU Campuses (FR–3937); 7212, Washington, DC 20410. customers. The purpose of this one-year and (2) Program with Units of General SUPPLEMENTARY INFORMATION: On trial program was to: (1) verify the Local Government (FR–3945). These September 29, 1995, HUD published degree to which the privatization of the NOFAs were published in the Federal two FY 1995 HBCU NOFAs: one reproduction order fulfillments of Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices 561

NNSP, NNSC, and NLNP could improve 4. How often the collection is Management and Budget, Washington, customer service; and (2) ascertain the required: Applications for licenses are DC 20503. extent to which digital scanning can submitted once. Applications for Comments can also be submitted by satisfy requirements from NARA’s renewals or amendments are submitted telephone at (202) 395–3084. customers. NARA has decided to extend as needed. Other reports are submitted the program for one more year, with annually and as other events require. The NRC Clearance Officer is Brenda some changes. All vendors interested in 5. Who will be required or asked to Jo. Shelton, (301) 415–7233. this program, including vendors already report: Applicants for and holders of an Dated at Rockville, Maryland, this 28th day participating, are invited to attend the NRC license for land disposal of low- of December 1995. next scheduled meeting on January 24, level radioactive waste, and all For the Nuclear Regulatory Commission. generators, collectors, and processors of 1996. A follow-up meeting has also been Arnold E. Levin, scheduled for February 15, 1996, to low-level waste intended for disposal at answer any remaining questions from a low-level waste facility. Acting Designated Senior Official for Information Resources Management. possible vendors, and to distribute 6. An estimate of the number of copies of the memorandum of responses: 146. [FR Doc. 96–207 Filed 1–05–96; 8:45 am] agreement. 7. The estimated number of annual BILLING CODE 7590±01±P respondents: 14 DATES: The next meeting will be held on 8. An estimate of the total number of Wednesday, January 24, 1996, at 2 p.m. hours needed annually to complete the NUREG; Issuance, Availability The follow-up meeting will be held on requirement or request: 7,538 Thursday, February 15, 1996, at 2 p.m. (approximately 3.5 hours per response The Nuclear Regulatory Commission ADDRESSES: The meetings will be held and 506 hours per recordkeeper). has recently published ‘‘Reassessment in Archives II, lecture rooms D and E, 9. An indication of whether Section of NRC’s Dollar Per Person—Rem located at 8601 Adelphi Road, College 3507(d), Pub. L. 104–13 applies: Not Conversion Factor Policy,’’ NUREG– Park, MD. applicable. 1530. The conversion factor establishes FOR FURTHER INFORMATION CONTACT: 10. Abstract: 10 CFR Part 61 the basis for translating radiological Michael Goldman, Administrative Staff, establishes the procedures, criteria, and exposure to a monetary value and as at 301–713–7010. license terms and conditions for the such allows direct comparison between Dated: January 2, 1996. land disposal of low-level radioactive the potential health and safety benefits waste. Reporting and recordkeeping Michael J. Kurtz, and the costs of a proposed regulatory requirements are mandatory or, in the initiative. This cost benefit tradeoff is an Assistant Archivist for the National Archives. case of application submittals, are important consideration in NRC [FR Doc. 96–198 Filed 1–5–96; 8:45 am] required to obtain a benefit. The regulatory decisions. The new BILLING CODE 7515±01±M information collected in the conversion factor policy discussed in applications, reports, and records is this document has been incorporated in evaluated by the NRC to ensure that the NUCLEAR REGULATORY licensee’s or applicant’s physical plant, ‘‘Regulatory Analysis Guidelines of the COMMISSION equipment, organization, training, U.S. Nuclear Regulatory Commission,’’ experience, procedures and plans NUREG/BR–0058, Revisions 2, Documents Containing Reporting or provide an adequate level of protection November 1995. Recordkeeping Requirements: Office of public health and safety, common Copies of NUREG–1530 may be of Management and Budget (OMB) defense and security, and the purchased from the Superintendent of Review environment. Documents, U.S. Government Printing AGENCY: U.S. Nuclear Regulatory A copy of the submittal may be Office, P.O. Box 37082, Washington, DC Commission (NRC). viewed free of charge at the NRC Public 20402–9328. Copies are also available Document Room, 2120 L Street, NW ACTION: Notice of the OMB review of from the National Technical Information information collection and solicitation (Lower Level), Washington, DC. Service, 5285 Port Royal Road, of public comment. The NRC hereby Members of the public who are in the Springfield, VA 22161. A copy is also informs potential respondents that an Washington, DC, area can access the available for inspection and/or copying agency may not conduct or sponsor, and submittal via modem on the Public for a fee in the NRC Public Document that a person is not required to respond Document Room Bulletin Board (NRC’s Room, 2120 L Street, NW. (Lower to, a collection of information unless it Advance Copy Document Library) NRC Level), Washington, DC 20555–0001. subsystem at FedWorld, 703–321–3339. displays a currently valid OMB control Members of the public who wish to Members of the public who are located number. comment on this NUREG-series report outside of the Washington, DC, area can may do so, and on the basis of these dial FedWorld, 1–800–303–9672, or use SUMMARY: The NRC has recently comments, the NRC holds open the the FedWorld Internet address: submitted to OMB for review the possibility of revising this policy in the fedworld.gov (Telnet). The document following proposal for the collection of future. information under the provisions of the will be available on the bulletin board Paperwork Reduction Act of 1995 (44 for 30 days after the signature date of Mail comments to: Chief, Rules U.S.C. Chapter 35). this notice. If assistance is needed in Review and Directives Branch, Division 1. Type of submission, new, revision, accessing the document, please contact of Freedom of Information and or extension: Revision. the FedWorld help desk at 703–487– Publications Services, Mail Stop T–6 2. The title of the information 4608. D59, U.S. Nuclear Regulatory collection: 10 CFR Part 61—Licensing Comments and questions should be Commission, Washington, DC 20555– Requirements for Land Disposal of directed to the OMB reviewer by 0001. Comments may be hand-delivered Radioactive Waste February 7, 1996: Troy Hillier, Office of to 11545 Rockville Pike, Rockville, 3. The form number if applicable: Not Information and Regulatory Affairs Maryland, between 7:45 a.m. and 4:15 applicable. (3150–0135), NEOB–10202, Office of p.m. on Federal workdays. 562 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices

Dated at Rockville, Maryland, this 29 day 2.A. If the Companies, or any concern 4. All matters involving the of December 1995. owned, controlled, operated or managed termination of employment of Mr. Bill M. Morris, by H. Nash Babcock, desire to lift the Edward P. Hollub are not covered by, or Director, Division of Regulatory Applications, prohibitions specified in paragraph 1.A affected by, this Stipulation, the Office of Nuclear Regulatory Research. and 1.B, above, then the Companies, H. Stipulation is without prejudice to the [FR Doc. 96–211 Filed 1–5–96; 8:45 am] Nash Babcock, or the concern owned, parties’ positions with respect to the BILLING CODE 7590±01±M controlled, operated, or managed by H. Commission’s jurisdiction or lack Nash Babcock, shall, at least 90 days thereof over employment matters, and prior to the date it desires to have the the NRC, the Companies, any other [No. IA 95±058] prohibition lifted: related company, and H. Nash Babcock (1) Advise the NRC of that intent in retain all rights in any such case, matter, Five Star Products, Inc. and writing; proceeding, or litigation now pending or Construction Products Research (2) Deleted. which may hereinafter be instituted. Fairfield, Connecticut and H. Nash (3) Agree in writing, under oath or Babcock; Stipulation Between Nuclear affirmation, and in fact, to permit the 5. In light of this Stipulation, the Regulatory Commission and Five Star NRC, NRC licensees, and contractors Companies and H. Nash Babcock agree Products, Inc., Construction Products performing QA functions for such not to request a hearing on the matters Research, Inc., and H. Nash Babcock licensees, to inspect the records, addressed in the Order issued on premises, basic components and December 1, 1995 and relaxed as Representatives of the Nuclear activities of the Companies or of any described herein, despite their vigorous concern owned, controlled, operated or Regulatory Commission (‘‘NRC’’) and disagreement with some of the Five Star Products, Inc., Construction managed by H. Nash Babcock that allegations contained in the December 1, Products Research, Inc. (‘‘the desires to provide safety-related 1995 Order. Companies’’), and H. Nash Babcock products or basic components, or to have met and have decided to resolve perform tests to support claims that 6. The NRC, the Companies, and H. this matter as addressed in this those products or components and those Nash Babcock agree that the allegations Stipulation as set out below. testing services meet the standards of 10 in the Order have not been made subject CFR Part 50 Appendix B and 10 CFR to an evidentiary hearing, and that this Stipulation Part 21, and to signify in writing a Stipulation will obviate the necessity for The NRC, the Companies, and H. willingness to do so in the future; such a hearing, and they therefore agree Nash Babcock stipulate to the following: (4) Agree in writing under oath or that those allegations shall not estop any 1. The Companies and H. Nash affirmation to demonstrate and in fact to party from taking a different position on Babcock are free to sell commercial- demonstrate that those basic grade products to anyone in the nuclear such matters in any other case, components and services associated litigation, matter, or proceeding. industry, as they now do. ‘‘Commercial- with basic components meet the grade’’ is defined as in 10 CFR Part 21 standards of 10 CFR Part 50 Appendix 7. The Order as relaxed herein shall of the Commission’s regulations. Five B by having tests performed by a be effective upon execution of this Star Products’ commercial-grade mutually acceptable third party and Stipulation. This Stipulation shall be materials may be used in any safety- having that third party provide copies of published in the Federal Register. related applications provided that NRC the results of those tests directly to the 8. The persons signing below certify licensees properly dedicate the NRC; and by their signatures that they have materials for use as basic components (5) The officers, managers, and authority to sign this Stipulation for the and verify their suitability for the supervisors of the Companies provide entities appearing below their names. applications. As of the date of the statements that they understand that the settlement, NRC has not evaluated the activities and records of the Dated: December 28, 1995. quality of Five Star Products’ materials, organization are subject to NRC For the United States Nuclear Regulatory nor has the NRC received reports that inspection and that communications Commission. Five Star Products’ materials contain with the NRC must be complete and James Lieberman, defects. accurate; Director, Office of Enforcement, U.S. Nuclear 2. The NRC hereby relaxes and B. When all conditions of paragraph Regulatory Commission. modifies paragraph 1 and 2 of Section 2.A above have been satisfied, and the Washington, DC 20555–0001 VI of the Order as follows: NRC has conducted inspections of the ‘‘1. Until the Companies or H. Nash QA program and Part 21 program of the (301) 415–2741 Babcock or any concern which is Companies or of any concern owned, Michael F. McBride, owned, controlled, operated or managed controlled, operated, or managed by H. LeBoeuf, Lamb, Greene & MacRae, L.L.P. by H. Nash Babcock, satisfy the Nash Babcock, and any necessary 1875 Connecticut Avenue, NW., provisions of paragraph 2 below, they corrective action has been completed, Suite 1200 are prohibited from: the prohibitions of paragraphs 1.A and Washington, DC 20009–5728 A. providing or supplying structures, 1.B, above, will be lifted in writing.’’ systems, or components, including grout 3. Except for the enforcement action (202) 986–8000 and concrete, subject to a procurement reflected in the above-relaxed Order and Attorney for Five Star Products, Inc., contract specifying compliance with 10 this Stipulation, the NRC will neither Construction Products Research, Inc., C.F.R. Part 50 Appendix B; and impose, nor seek to impose, any and H. Nash Babcock. B. providing or supplying basic sanction (other than as set forth in the [FR Doc. 96–212 Filed 1–5–96; 8:45 am] components, including grout and relaxed Order and Stipulation) on the BILLING CODE 7590±01±M concrete, subject to a procurement Companies or their officers and contract specifying that the contract is employees or H. Nash Babcock for the subject to the requirements of 10 CFR alleged violations described in the NRC Part 21; Order issued on December 1, 1995. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices 563

[Docket No. 50±284] nature and extent of the petitioner’s Document Room, the Gelman Building, property, financial, or other interest in 2120 L Street, NW, Washington, DC Idaho State University; Notice of the proceeding; and (3) the possible within the time prescribed above. Consideration of Application for effect of any order which may be Where petitions are filed during the last Renewal of Facility License entered in the proceeding on the ten (10) days of the notice period, it is The United States Nuclear Regulatory petitioner’s interest. The petition should requested that the petitioner promptly Commission (the Commission) is also identify the specific aspect(s) of the so inform the Commission by a toll-free considering renewal of Facility License subject matter of the proceeding as to telephone call to Western Union at 1– No. R–110, issued to the Idaho State which petitioner wishes to intervene. (800) 325–6000 (in Missouri 1–(800) University (ISU) for operation of the Any person who has filed a petition for 342–6700). The Western Union operator Idaho State University AGN–201 reactor leave to intervene or who has been should be given Datagram Identification located on the ISU campus in the city admitted as a party may amend the Number 3737 and the following message of Pocatello, Idaho. petition without requesting leave of the addressed to Seymour H. Weiss: The renewal would extend the Board up to fifteen (15) days prior to the petitioner’s name and telephone expiration date of Facility License No. first prehearing conference scheduled in number; date petition was mailed; Idaho R–110 for twenty years from date of the proceeding, but such an amended State University; and publication date issuance, in accordance with the petition must satisfy the specificity and page number of this Federal licensee’s timely application for renewal requirements described above. Register notice. A copy of the petition Not later than fifteen (15) days prior dated November 21, 1995. should also be sent to the Office of the to the first prehearing conference Prior to a decision to renew the General Counsel, U.S. Nuclear scheduled in the proceeding, a license, the Commission will have made Regulatory Commission, Washington, petitioner shall file a supplement to the D.C. 20555, and to Mr. J. Kelley findings required by the Atomic Energy petition to intervene which must Wiltbank, General Counsel, Idaho State Act of 1954, as amended (the Act), and include a list of the contentions which University, P.O. Box 8410, Pocatello , the Commission’s regulations. are sought to be litigated in the matter. Idaho 83209, attorney for the licensee. Within thirty days of publication of Each contention must consist of a Nontimely filings of petitions for this notice, the licensee may file a specific statement of the issue of law or leave to intervene, amended petitions, request for a hearing with respect to fact to be raised or controverted. In supplemental petitions and/or requests renewal of the subject facility license addition, the petitioner shall provide a for hearing will not be entertained and any person whose interest may be brief explanation of the bases of the absent a determination by the affected by this proceeding and who contention and a concise statement of Commission, the presiding officer or the wishes to participate as a party in the the alleged facts or expert opinion presiding Atomic Safety and Licensing proceeding must file a written request which support the contention and on Board that the petition and/or request for a hearing and a petition for leave to which the petitioner intends to rely in should be granted based upon a intervene. Requests for a hearing and a proving the contention at the hearing. balancing of factors specified in 10 CFR petition for leave to intervene shall be The petitioner must also provide 2.714(a)(1)(i)–(v) and 2.714(d). filed in accordance with the references to those specific sources and For further details with respect to this Commission’s ‘‘Rules of Practice for documents of which the petitioner is action, see the application for renewal Domestic Licensing Proceedings’’ in 10 aware and on which the petitioner dated November 21, 1995, which is CFR Part 2. Interested persons should intends to rely to establish those facts or available for public inspection at the consult a current copy of 10 CFR 2.714 expert opinion and the petitioner must Commission’s Public Document Room which is available at the Commission’s provide sufficient information to show at 2120 L Street, NW, Washington, DC Public Document Room, the Gelman that a genuine dispute exists with the 20555. Building, 2120 L Street, NW, applicant on a material issue of law or Dated at Rockville, Maryland, this 28th day Washington, DC 20037. If a request for fact. Contentions shall be limited to of December 1995. a hearing or petition for leave to matters within the scope of the For the Nuclear Regulatory Commission. intervene is filed within the time amendment under consideration. The Seymour H. Weiss, prescribed above, the Commission or an contention must be one which, if Atomic Safety and Licensing Board, Director, Non-Power Reactors and proven, would entitle the petitioner to Decommissioning Project Directorate, designated by the Commission or by the relief. A petitioner who fails to file such Division of Reactor Program Management, Chairman of the Atomic Safety and a supplement which satisfies these Office of Nuclear Reactor Regulation. Licensing Board Panel, will rule on the requirements with respect to at least one [FR Doc. 96–208 Filed 1–5–96; 8:45 am] request and/or petition and the contention will not be permitted to BILLING CODE 7590±01±P Secretary or the designated Atomic participate as a party. Safety and Licensing Board will issue a Those permitted to intervene become notice of hearing or an appropriate parties to the proceeding, subject to any [Docket Number 40±0299] order. limitations in the order granting leave to As required by 10 CFR 2.714, a intervene, and have the opportunity to Amendment to Change a Reclamation petition for leave to intervene shall set participate fully in the conduct of the Milestone Date in Source Material forth with particularity the interest of hearing, including the opportunity to License SUA±648 Held by Umetco the petitioner in the proceeding, and present evidence and cross-examine Minerals Corporation how that interest may be affected by the witnesses. AGENCY: U.S. Nuclear Regulatory results of the proceeding. The petition A request for a hearing or a petition Commission. should specifically explain the reasons for leave to intervene must be filed with ACTION: Amendment of Source Material why intervention should be permitted Secretary of the Commission, U.S. License SUA–648 to change a with particular reference to the Nuclear Regulatory Commission, reclamation milestone date. following factors: (1) the nature of the Washington, DC 20555, Attention: petitioner’s right under the Act to be Docketing and Service Branch, or may SUMMARY: Notice is hereby given that made a party to the proceeding; (2) the be delivered to the Commission’s Public the U.S. Nuclear Regulatory 564 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices

Commission has amended Umetco Dated at Rockville, Maryland, this 29th day Commission’s related Safety Evaluation, Mineral Corporation’s (Umetco’s) of December 1995. and (4) the Commission’s Source Material License SUA–648 to Daniel M. Gillen, Environmental Assessment. All of these change a reclamation milestone date. Acting Chief, High-Level Waste and Uranium, items are available for public inspection This amendment was requested by Recovery Projects Branch, Division of Waste at the Commission’s Public Document Umetco by letter dated October 11, Management, Office of Nuclear Material Room, the Gelman Building, 2120 L 1995, and its receipt by NRC was Safety and Safeguards. Street NW., Washington, DC, and at the noticed in the Federal Register on [FR Doc. 96–209 Filed 1–05–96; 8:45 am] local public document room located at November 6, l995. BILLING CODE 7590±01±P the Swem Library, College of William and Mary, Williamsburg, Virginia The license amendment modifies 23185. License Condition 59 to change the [Docket Nos. 50±280 and 50±281] completion date for a site-reclamation Dated at Rockville, Maryland, this 28th day of December, 1995. milestone. The new date approved by Virginia Electric and Power Company For the Nuclear Regulatory Commission. the NRC extends completion of Notice of Issuance of Amendment to placement of final radon barrier on the Facility Operating License Bart C. Buckley, Heap Leach impoundment by two years. Senior Project Manager, Project Directorate The U.S. Nuclear Regulatory II–1, Division of Reactor Projects—I/II Office Umetco attributes the delay to the Commission (Commission) has issued of Nuclear Reactor Regulation. following factors: (1) At present there is Amendment Nos. 207 and 207 to [FR Doc. 96–210 Filed 1–5–96; 8:45 am] no approved reclamation plan for the Facility Operating License Nos. DPR–32 BILLING CODE 7590±01±P Heap Leach impoundment, partly and DPR–37 issued to the Virginia because of delay in seismic evaluation Electric and Power Company (the of the site by the NRC staff; (2) Radium licensee), which revised the Technical OFFICE OF MANAGEMENT AND concentrations in the outslopes of the Specifications for operation of the Surry BUDGET Heap Leach impoundment have been Power Station, Units 1 and 2 located in identified that may require redesign of Surry County, Virginia. The Office of Federal Procurement Policy this feature to comply with 10 CFR Part amendments are effective as of the date 40, Appendix A, Criterion 6(b); and (3) of issuance. Notice of Availability of the Umetco has decided, in a good faith The amendments modified the Procurement Regulatory Activity effort, to upgrade the final design to Technical Specifications to revise the Report, Number 12 reactor vessel pressure/temperature provide the necessary and reasonable AGENCY: Office of Management and assurance that the longevity goals will limit and an associated low temperature overpressure protection system setpoint. Budget, Office of Federal Procurement be satisfied. Based on review of Policy. Umetco’s submittal, the NRC staff The application for the amendments complies with the standards and SUMMARY: Subsections 25(g) (1) and (2) concludes that the delay is attributable of the Office of Federal Procurement to factors beyond the control of Umetco, requirements of the Atomic Energy Act of 1954, as amended (the Act), and the Policy (OFPP) Act, as amended by the proposed work is scheduled to be Commission’s rules and regulations. Public Law 100–679, codified at 41 completed as expeditiously as The Commission has made appropriate U.S.C. § 421(g), require the practicable, and the added risk to the findings as required by the Act and the Administrator for Federal Procurement public health and safety is not Commission’s rules and regulations in Policy to publish a report within six significant. 10 CFR Chapter I, which are set forth in months after the date of enactment and An environmental assessment is not the license amendments. every six months thereafter relating to required since this action is Notice of Consideration of Issuance of the development of procurement categorically excluded under 10 CFR Amendment to Facility Operating regulations. 51.22(c)(11), and an environmental License and Opportunity for a Hearing Accordingly, OFPP has prepared this report from the licensee is not required in connection with this action was report, which is designed to satisfy all by 10 CFR 51.60(b)(2). published in the Federal Register on aspects of subsections 25(g)(1) and (2) of August 4, 1995 (60 FR 39978). No the OFPP Act, and includes information SUPPLEMENTARY INFORMATION: Umetco’s request for a hearing or petition for on the status of each regulation; a license, including an amended License leave to intervene was filed following description of those regulations required Condition 59, and the NRC staff’s this notice. by statute; a description of the methods technical evaluation of the amendment The Commission has prepared an by which public comment was sought; request are being made available for Environmental Assessment related to regulations, policies, procedures, and public inspection at the Commission’s the action and has determined not to forms under review by the OFPP; Public Document Room at 2120 L Street, prepare an environmental impact whether the regulations have paperwork NW (Lower Level), Washington, DC statement. Based upon the requirements; the progress made in 20555. environmental assessment, the promulgating and implementing the Commission has concluded that the Federal Acquisition Regulation; and FOR FURTHER INFORMATION CONTACT: issuance of the amendments will not such other matters as the Administrator Mohammad W. Haque, High-Level have a significant effect on the quality determines to be useful. Waste and Uranium Recovery Projects of the human environment (60 FR ADDRESSES: Those persons interested in Branch, Division of Waste Management, 54710). obtaining a copy of the Procurement U.S. Nuclear Regulatory Commission, For further details with respect to the Regulatory Activity Report may contact Washington, DC 20555. Telephone (301) action see (1) the application for the Executive Office of the President 415–6640. amendments dated June 8, 1995, (2) Publications Service, Room 2200, 725 Amendment No. 207 to License Nos. 17th Street, NW, Washington, DC 20503, DPR–32 and DPR–37, (3) the or call 202–395–7332. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices 565

ADDITIONAL INFORMATION: For additional Department of Agriculture Department of Education information write the Office of Federal Confidential Assistant to the Chief, Confidential Assistant to the Special Procurement Policy, 725 17th Street, Natural Resources Conservation Service. Advisor to the Secretary. Effective NW, Washington, DC 20503 or call 202– Effective November 22, 1995. November 22, 1995. 395–6803. Director, Legislative Affairs to the Special Assistant to the Assistant Dated: January 2, 1996. Under Secretary, Cooperative State Secretary, Office of Intergovernmental Steven Kelman, Research, Education and Extension and Interagency Affairs. Effective Administrator. Service. Effective November 22, 1995. November 22, 1995. [FR Doc. 96–184 Filed 1–5–96; 8:45 am] Confidential Assistant to the Special Assistant to the Deputy Under BILLING CODE 3110±01±P Administrator, Rural Utilities Service. Secretary. Effective November 22, 1995. Effective November 30, 1995. Department of Energy Confidential Assistant to the Special Assistant to the Director, Administrator, Consolidated Farm Office of Worker and Community OFFICE OF PERSONNEL Service Agency. Effective November 30, Transition. Effective November 2, 1995. MANAGEMENT 1995. Senior Advisor to the Assistant Excepted Service Department of Commerce Secretary for Congressional and Intergovernmental Affairs. Effective AGENCY: Director, National Information Office of Personnel November 3, 1995. Management. Infrastructure Initiatives to the Assistant ACTION: Notice. Secretary for Communications and Department of Health and Human Information. Effective November 3, Services SUMMARY: This gives notice of positions 1995. Director, Office of Scheduling to the placed or revoked under Schedules A Confidential Assistant to the Director, Chief of Staff, Office of the Secretary. and B, and placed under Schedule C in Office of Legislative Affairs. Effective Effective November 7, 1995. the excepted service, as required by November 9, 1995. Deputy Chief of Staff to the Chief of Civil Service Rule VI, Exceptions from Congressional Affairs Specialist to the Staff. Effective November 7, 1995. the Competitive Service. Director, Office of Legislative Affairs, Director of Speech writing to the FOR FURTHER INFORMATION CONTACT: National Oceanic and Atmospheric Deputy Assistant Secretary for Public Patricia Paige, (202) 606–0830. Administration. Effective November 9, Affairs (Media). Effective November 13, SUPPLEMENTARY INFORMATION: The Office 1995. 1995. of Personnel Management published its Senior Advisor for Policy and Confidential Assistant (Scheduling) to last monthly notice updating appointing Planning to the Under Secretary for the Director of Scheduling. Effective authorities established or revoked under International Trade, International Trade November 22, 1995. the Excepted Service provisions of 5 Administration. Effective November 20, Congressional Liaison Specialist to CFR 213 on December 15, 1995 (60 FR 1995. the Deputy Assistant Secretary for 64457). Individual authorities Special Assistant to the Senior Policy Legislation (Congressional Liaison). established or revoked under Schedules Advisor. Effective November 30, 1995. Effective November 22, 1995. A and B and established under Deputy Assistant Secretary for Department of Labor Schedule C between November 1, 1995, Textiles, Apparel and Consumer Goods and November 30, 1995, appear in the to the Assistant Secretary for Trade Special Assistant to the Assistant listing below. Development. Effective November 30, Secretary for Policy. Effective November Future notices will be published on 1995. 13, 1995. the fourth Tuesday of each month, or as Confidential Assistant to the Deputy Special Assistant to the Executive soon as possible thereafter. A Assistant Secretary for Textiles, Apparel Secretary. Effective November 13, 1995. consolidated listing of all authorities as and Consumer Goods. Effective Chief of Staff to the Assistant of June 30 will also be published. November 30, 1995. Secretary for Public Affairs. Effective November 22, 1995. Schedule A Department of Defense Chief of Staff to the Assistant No Schedule A authorities were Speechwriter to the Assistant to the Secretary for Policy. Effective November established. Secretary of Defense for Public Affairs. 22, 1995. The following exception was revoked: Effective November 3, 1995. Department of State Personal and Confidential Assistant to Federal Housing Finance Board Foreign Affairs Officer to the Deputy the Defense Advisor, U.S. Mission to Assistant Secretary, Bureau of Public Section 213.3187 (Revoked). NATO. Effective November 3, 1995. Affairs. Effective November 3, 1995. Schedule B Defense Fellow to the Deputy Department of Transportation No Schedule B authorities were Assistant Secretary of Defense established or revoked November 1995. (European and NATO Policy). Effective Special Assistant to the Assistant to November 13, 1995. Secretary and Director of Public Affairs. Schedule C Staff Assistant to the Special Assistant Effective November 3, 1995. The following Schedule C authorities to the Principal Deputy Under Secretary Special Assistant to the Associate were established in November 1995. of Defense (Policy). Effective November Director for Media Relations and Special 13, 1995. Projects. Effective November 3, 1995. Commission on Civil Rights Staff Specialist for Cuban Affairs to Special Assistant to the the Deputy Assistant Secretary of U.S. International Trade Commission Commissioner. Effective November 21, Defense (Inter-American Affairs). Staff Assistant (Legal) to the 1995. Effective November 30, 1995. Chairman. Effective November 28, 1995. 566 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices

United States Information Agency 1995, the CBOE filed Amendment No. 2 partner, respectively) assumes the 5 Special Assistant to the Director, to its proposal. No comments were positions, (iii) the transfer of positions Office of Citizen Exchanges, Bureau of received regarding the CBOE’s proposal. as part of a member’s capital Educational and Cultural Affairs. This order approves the proposal. contribution to a new joint account, partnership, or corporation, (iv) the Effective November 1, 1995. II. Description of the Proposal donation of positions to a not-for-profit Authority: 5 U.S.C. 3301 and 3302; E.O. The Exchange has a long-standing corporation, (v) the transfer of positions 10577, 3 CFR 1954–1958 Comp., P.218. policy of prohibiting off-floor transfers to a minor under the ‘‘Uniform Gifts to Office of Personnel Management. of option positions between accounts, Minor’’ law, and (vi) a merger or Lorraine A. Green, individuals, or entities where a change acquisition where continuity of Deputy Director. in beneficial ownership would result. ownership or management results. [FR Doc. 96–199 Filed 1–5–96; 8:45 am] The Exchange, however, previously has Because the Exchange recognizes that BILLING CODE 6325±01±M made exceptions to this general policy there may be other circumstances where under certain limited circumstances, an off-floor transfer may be justified, allowing otherwise prohibited such as emergency transfers of a firm’s transactions to be completed off the positions in bulk during a market crisis, SECURITIES AND EXCHANGE floor of the Exchange. it also is proposing to allow the COMMISSION The CBOE’s proposal seeks to Exchange’s President to grant an [Release No. 34±36647; File No. SR±CBOE± formalize the Exchange’s policies in this exemption from CBOE Rule 6.49(a) on 95±36] area by adopting Rule 6.49A, which his own motion or upon application of provides for the off-floor transfer of the Transferor. Such exemptions may be Self-Regulatory Organizations; positions based on certain specified granted when in the President’s Chicago Board Options Exchange, exemptions, or as approved by the judgement the market value of the Inc.; Order Approving and Notice of Exchange’s President when in the Transferor’s business will be Filing and Order Granting Accelerated President’s judgement the market value compromised by having to comply with Approval of Amendments No. 1 and 2 of the Transferor’s business will be this requirement or market conditions to a Proposed Rule Change Relating to comprised by having to comply with make transfer on the floor impractical. the Transfer of Positions on the Floor this requirement or when market In addition, proposed CBOE Rule of the Exchange in Cases of conditions make transfer on the floor 6.49A establishes a special procedure to Dissolution and other Situations impractical. Situations in which permit options positions to be offered members will be permitted to effect off- on the floor of the Exchange in the event December 28, 1995. floor transfers under the proposed rule that the positions are being transferred I. Introduction include: (i) The dissolution of a joint as part of a sale or disposition of all or account in which the remaining member substantially all of the assets or options On July 13, 1995, the Chicago Board assumes the positions of the joint positions of the transferring Exchange Options Exchange, Inc. (‘‘CBOE’’ or account, (ii) the dissolution of a member or member organization ‘‘Exchange’’) filed with the Securities corporation or partnership in which a (‘‘Transferor’’). The purpose of this and Exchange Commission former nominee of the corporation or portion of the proposal is to establish a (‘‘Commission’’ or ‘‘SEC’’), pursuant to partnership (i.e., a shareholder or special on-floor procedure that ensures Section 19(b)(1) of the Securities 1 that the transferring member gets the Exchange Act of 1934 (‘‘Act’’) and Rule general proposition that all transactions in CBOE 2 best possible price for that member’s 19b–4 thereunder, a proposal to adopt options must be brought to the floor, unless positions and that other members of the permitted to be done elsewhere by CBOE Rule 6.49, new CBOE Rule 6.49A, which would: (i) Exchange have an adequate opportunity Identify certain transfers of options and the paragraph establishes an optional procedure for transferring certain of these positions. to make bids and offers on positions that positions not subject to the In addition, Proposed Interpretation .02 is moved are being transferred. requirements contained in CBOE Rule into the text of the rule. Amendment No. 1 also The special on-floor procedure 6.49 that generally requires transactions modifies proposed CBOE Rule 6.49A(d), which established by the proposed rule also of option contracts listed on the would authorize the President of the CBOE to grant exemptions from the rule’s requirement to bring may be used by market makers who, for Exchange for a premium in excess of positions to the floor, by making the guidelines reasons other than a forced liquidation, $1.00 to be effected on the floor of the under which the President is to evaluate the such as an extended vacation, wish to Exchange or on another exchange; (ii) exemption request more straightforward and objective; and by making it clear that the exemption liquidate their entire, or nearly their provide for the Exchange President to is from the requirement to bring the position to the entire, open positions in a single set of grant exemptions from the general Rule floor and not an exemption from the procedure, transactions. As the procedure 6.49 on-floor requirement; and (iii) since the use of the procedure set forth in proposed established by the proposed rule is not establish an optional procedure for 6.49A(c) is an optional procedure. Letter from Timothy Thompson, CBOE, to Michael Walinskas, meant to replace the normal Exchange transferring positions on the floor of the Branch Chief, Division of Market Regulation auction market, however, repeated and Exchange in cases of dissolution and (‘‘Division’’), Commission, dated December 20, frequent use of the proposed rule by the other situations. The proposed rule 1995. same member will not be permitted. change was published for comment and 5 In Amendment No. 2, the CBOE seeks to clarify the relationship between Rule 6.49 and proposed Pursuant to the proposal, the special appeared in the Federal Register on Rule 6.49A. Rule 6.49(a) describes the types of on-floor procedure provides that a 3 September 25, 1995. On December 20, transactions in CBOE options which are required to Transferor may offer a set of options or 1995, the CBOE filed Amendment No. 1 be transacted on the floor of the Exchange or on other financial instruments as a package to its proposal,4 and on December 21, another exchange that trades such options. Amendment No. 2 eliminates similar language from (‘‘Transfer Package’’), to be bid upon at proposed Rule 6.49A. Thus, the list of transactions a net debit or credit for the entire 1 15 U.S.C. 78s(b)(1) (1988). described in proposed Rule 6.49A(a)(1) are Transfer Package. A single Transfer 2 17 CFR 240.19b–4 (1994). exceptions to the general requirement set forth in Package may include no more than one 3 See Securities Exchange Act Release No. 36241 Rule 6.49(a). Letter from Timothy Thompson, (September 15, 1995), 60 FR 49430. CBOE, to Michael Walinskas, Branch Chief, class of option listed on the Exchange, 4 In Amendment No. 1, the CBOE modifies Division, Commission, dated December 21, 1995 but also may include stock or other proposed CBOE Rule 6.49A(a) to make clear the (‘‘Amendment No. 2’’). securities. A Transferor may offer Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices 567 multiple Transfer Packages on the floor At the end of the Response Request be canceled at the election of any at the same time or on the same day. Time, the Transferor will be allowed to member that is a party to that trade. Moreover, a member or member accept the best bid or offer (‘‘BBO’’) for To the extent possible, equal bids for organization may make an aggregate bid any individual Transfer Package, or for Transfer Packages will be split equally or offer for any number of Transfer any combination of Transfer Packages if among the parties submitting the equal Packages offered by a single Transferor. the bid or offer for the combination is bids, or will be split in such a manner In the event that the aggregate bid or superior to the aggregate of the as may be agreed upon by the offer is superior to the combination of individual bids or offers for the submitting parties. 8 the individual best bids or offers for the individual Transfer Packages. III. Discussion individual Transfer Packages, the Acceptance of a BBO creates a binding Transferor will be allowed to accept that contract under CBOE Rule 6.48, The Commission finds the proposed aggregate bid or offer for a combination however, a Transferor is not obligated to rule change consistent with the of, or all of, the Transfer Packages. The accept a BBO. If the Transferor chooses requirements of the Act and the rules Exchange believes that allowing the not to accept the BBO for the Transfer and regulations thereunder applicable to Transferor to accept aggregate bids or Packages, the Transferor may offer the a national securities exchange. offers will ensure that the Transferor positions in any Transfer Package the Specifically, the proposed rule change is gets the best possible price for his next day. Because the Exchange intends consistent with the requirements of positions.6 for its proposal to be a transfer Section 6(b)(5) of the Act because the Any Transfer Package consisting of procedure and not a price discovery proposal is designed to promote just and positions both in an option class and in mechanism, the Transferor will require equitable principles of trade, foster other financial instruments must be the permission of the President of the cooperation with persons engaged in offered at the Exchange’s Flexible Exchange to offer the positions on the facilitating and clearing transactions in Exchange Options (‘‘FLEX’’) post, and Exchange floor for any day subsequent securities, and protect investors and the will be subject to many of the to the second day. public interest. The Commission believes that the procedures established for trading FLEX Bids and offers will be made on a net CBOE’s proposal clearly delineates the options. debit or credit basis for entire Transfer Any Transfer Package consisting exceptions to CBOE Rule 6.49(a)’s Packages. In the event that a particular solely of positions in one option class general requirement that all CBOE Transfer Package contains stock that does not include stock or other members’ transactions in CBOE options positions or other positions whose securities will be offered by the be effected on the floor of an exchange.9 transfer must be transacted on another Transferor at the post at which that In the Commission’s opinion, it is exchange pursuant to applicable law or options class is traded (‘‘Post-Specific appropriate for the CBOE to provide for regulation (‘‘Off Floor Portions’’), then Transfer Packages’’). Components of transfers to occur off the floor of the any accepted quote for the Transfer Post Specifer Transfer Packages should Exchange in certain situations. Thus, Package shall give rise to a contract for be individually priced and reported and the proposal envisions allowing off-floor the option portion of the Transfer will be subject to the Exchange’s transfers in several narrowly-defined Package, the price of which is ordinary procedures for trading options. situations where the transfer results in Any firm submitting a Transfer contingent on the price at which those some degree of continuity in the Package will be required to designater a other portions of the Transfer Package ownership or management of the member of the exchange or a person are transacted. The price at which the position or transfer is necessitated by associated with a member to represent options position shall be transacted is certain legal or similar reasons, or where the order on the floor of the Exchange. the price that is required to have the the President of the Exchange judges This designee must be available on the entire Transfer Package trade at the that the market value of the Transferor’s Exchange floor to answer questions agreed upon net debit or credit, taking business will be compromised, or judges regarding the Transfer Package during into consideration the prices at which that market conditions make the transfer the entire Request Response Time (as the Off Floor Portions have been process impractical.10 The Commission defined below). In addition, notice must transacted. All transactions that are believes that it is reasonable and be given to the Order Book Official of required to be completed must be consistent with the Act to provide for each post (or the Designated Primary completed in time to allow the option off-floor transfers to be effected under Market Maker, as appropriate) where a portion to be transacted by the end of these circumstances. component of the Transfer Package the trading day. The Commission believes that the trades. In the event that a transaction in a special on-floor procedures are designed Following the offer of the Transfer non-CBOE listed component of the Packages, interested members of the to extend the benefits of an auction Transfer Package cannot be completed marketplace to the transactions outlined Exchange will be given two hours to in a timely manner due to a trading halt, submit a bid for one or any combination in Rule 6.49A(b)(1). More specifically, an operational problem outside the the special on-floor procedures of the Transfer Packages offered by the control of the parties, or the closing of Transferor (‘‘Response Request Time’’).7 proposed by the CBOE should expose the applicable market before the the affected positions to the auction transaction can be completed, the trade 6 market, albeit in a somewhat different Telephone conversation between Tim for the option portion of the trade may Thompson, Senior Attorney, Legal Department, manner than governed by regular CBOE, and Brad Ritter, Office of Market trading procedures. Supervision, Division of Market Regulation, 8 For example, if a Transferor offers four Transfer The Commission finds food cause for Commission, on July 25, 1995 (‘‘July 25 Packages, and following the Request Response Conservation’’). Time, the Transferor receives bids for three of the approving Amendments No. 1 and 2 to 7 The two hour time could be shortened or Transfer Packages and one aggregate bid for all four the proposed rule change prior to the lengthened with the approval of the President. Any Transfer Packages, then, if the aggregate bid is thirtieth day after the date of Transfer Package offered after 1:00 p.m., Chicago greater than the sum of the best individual bids for publication of notice thereof in the time, will require the prior approval of the the three Transfer Packages, the Transferor may President. The proposed rule will prevent the accept the aggregate bid and transfer all four President from permitting offers to be brought after Transfer Packages. See July 25 Conversation, supra 9 See Amendment No. 2, supra note 5. 2:30 p.m., Chicago time. note 6. 10 See Amendment No. 1, supra note 4. 568 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices

Federal Register. The Commission Margaret H. McFarland, partnerships (‘‘LLPs’’),6 and business believes that Amendments No. 1 and 2 Deputy Secretary. trusts.7 As of February 5, 1995, benefit the Exchange’s proposal by [FR Doc. 96–179 Filed 1–5–96; 8:45 am] Pennsylvania has authorized the clarifying the relationship between the BILLING CODE 8010±01±M existence of LLCs and LLPs. Presently, proposed rule and existing Exchange the Exchange’s By-Laws and Rules Rule 6.49. The Amendments also revise recognize two types of member the language concerning the exemptions [Release No. 34±36660; File No. SR±Phlx± organizations: partnerships under the from the general requirement of Rule 95±73] term ‘‘member firm’’ and corporations 6.49(a) that transactions in CBOE under the term ‘‘member corporation.’’ options be effected on the floor of the Self-Regulatory Organizations; The proposed rule change would CBOE or other exchange. The Philadelphia Stock Exchange, Inc.; allow the Exchange to recognize these Commission believes that the Order Granting Approval to Proposed new legal entities as Phlx member firms amendments clarify the existing terms Rule Change Relating to New by amending the definitions of ‘‘member of the CBOE’s proposal, rather than Organizational Structures for Members firm’’ found in Article I, Section 1–1(c) make any substantive changes. Based on of the By-Laws and Rule 3 to encompass December 29, 1995. organizations that are essentially similar the foregoing, the Commission believes On October 4, 1995, the Philadelphia it is consistent with Section 6(b)(5) of to member firms including, but not Stock Exchange, Inc. (‘‘Phlx’’ or limited to, LLCs, LLPs, and business the Act to approve Amendments No. 1 ‘‘Exchange’’) submitted to the Securities and 2 to the Exchange’s proposal on an trusts. and Exchange Commission The Exchange also proposes to amend accelerated basis. (‘‘Commission’’), pursuant to Section Article I, Section 1–1(c) and Rule 3 to IV. Solicitation of Comments 19(b)(1) of the Securities Exchange Act make provisions in the Phlx By-Laws of 1934 (‘‘Act’’) 1 and Rule 19b–4 and rules that pertain to general, special Interested persons are invited to thereunder,2 a proposed rule change to or limited partners in partnership submit written data, views, and include within the definition of member firms applicable, as arguments concerning Amendments No. ‘‘member firm’’ found in the Phlx By- appropriate, to those persons who 1 and 2 to the proposed rule change. Laws and rules entities with perform essentially similar functions as Persons making written submissions organizational structures essentially such partners in non-partnership should file six copies thereof with the similar to partnerships and corporations member firms.8 Secretary, Securities and Exchange and to make the provisions in its By- The Commission finds that the Commission, 450 Fifth Street, NW., Laws and rules that pertain to partners proposed rule change is consistent with Washington, DC 20549. Copies of the of partnership member firms applicable the requirements of the Act and the submission, all subsequent to those persons performing similar rules and regulations thereunder amendments, all written statements functions in non-partnership member applicable to a national securities with respect to the proposed rule firms. On October 11, 1995, the exchange, and, in particular, with the change that are filed with the Exchange submitted to the Commission requirements of Section 6(b).9 Commission, and all written Amendment No. 1 to the proposed rule Specifically, the Commission believes communications relating to the change,3 and on November 1, 1995, the that the proposed rule change is proposed rule change between the Exchange submitted Amendment No. 2 consistent with Section 6(b)(2) of the Commission and any person, other than to the proposed rule change.4 those that may be withheld from the The proposed rule change and Study of the Emerging Entity, 47 Bus. Law. 378 public in accordance with the Amendment Nos. 1 and 2 were (1992). provisions of 5 U.S.C. 552, will be published for comment in Securities 6 An LLP differs from a traditional partnership entity in two significant ways. First, in an LLP the available for inspection and copying in Exchange Act Release No. 36482 liability of a partner or the partnership is no longer the Commission’s Public Reference (November 14, 1995), 60 FR 58126 joint and several among the partners; instead, a Section, 450 Fifth Street, NW., (November 24, 1995). No comments partner generally will be personally liable only for Washington, DC. Copies of such filing were received on the proposal. his or her own conduct and that of those under his or her direct supervision. Second, an LLP is treated will also be available for inspection and Recently, Pennsylvania law and the as a pass-through entity for federal income tax copying at the principal office of the laws of 46 other jurisdictions have purposes. See Sharon Kanovsky, LLPs: A New Form Exchange. All submissions should refer recognized the existence of new legal of Organization, 25 Tax Advisor 409 (1994). to File No. SR–CBOE–95–36 and should entities such as limited liability 7 The term ‘‘business trust’’ is generally used to companies (‘‘LLCs’’),5 limited liability describe a trust in which the managers are be submitted by January 29, 1996. principals and the shareholders are cestuis que trust. Its essential attribute is that property is placed V. Conclusion 1 15 U.S.C. 78s(b)(1). in the hands of trustees who manage and deal with 2 17 CFR 240.19b–4. it for the use and benefit of beneficiaries. Black’s For the reasons discussed above, the 3 See Letter from Murray L. Ross, Secretary, Phlx, Law Dictionary 180 (5th ed. 1979). Commission finds that the proposal, as to Glen Barrentine, Senior Counsel, SEC, dated 8 Amendment No. 2 added this provision to the amended, is consistent with the Act, October 2, 1995. Amendment No. 1 renumbered the proposed rule change. Amendment No. 2 also and, in particular, Section 6 of the Act. rule filing. withdrew a proposed change to Rule 902 that 4 See Letter from Murray L. Ross, Secretary, Phlx, would have required a member intending to form It is therefore ordered, pursuant to to Glen Barrentine, Senior Counsel, SEC, dated a non-partnership member firm to submit certain Section 19(b)(2) of the Act,11 that the October 25, 1995. See infra note 8 and text specified documentation to the Exchange, as the proposed rule change (File No. SR– accompanying note 11 for a description of proposed change to Rule 3 gives the Exchange the Amendment No. 2. authority to require the submission of such CBOE–95–36), as amended, is approved. 5 An LLC combines various characteristics of both documentation under the current Rule 902. For the Commission, by the Division of corporations and partnerships. For example, an LLC Amendment No. 2 also included additional Market Regulation, pursuant to delegated is a non-corporate entity under which neither the minimum requirements to be satisfied before LLCs, authority.12 owners nor those managing the business are LLPs, business trusts, or other organizations with personally liable for the entity’s obligations, characteristics of partnerships or corporations could however, the LLC is treated as a pass-through entity be approved as Phlx members. See note 11 and 11 15 U.S.C. 78s(b)(2) (1988). for federal income tax purposes. See Robert R. accompanying text. 12 17 CFR 200.30–3(a)(12) (1994). Keatinge et al., The Limited Liability Company: A 9 15 U.S.C. 78f(b). Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices 569

Act, which requires the rules of an It is therefore ordered, pursuant to issue an order granting the application exchange, subject to the provisions of Section 19(b)(2) of the Act,12 that the after the date mentioned above, unless Section 6(c) of the Act,10 to ensure that proposed rule change (SR–Phlx–95–73), the Commission determines to order a any registered broker or dealer or as amended, is approved. hearing on the matter. natural person associated with a For the Commission, by the Division of For the Commission, by the Division of registered broker or dealer may become Market Regulation, pursuant to delegated Market Regulation, pursuant to delegated a member of the exchange and any authority. 13 authority. person may become associated with a Margaret H. McFarland, Jonathan G. Katz, member thereof. Deputy Secretary. Secretary. The Phlx currently allows [FR Doc. 96–180 Filed 1–5–96; 8:45 am] [FR Doc. 96–200 Filed 1–5–96; 8:45 am] individuals, partnerships, and BILLING CODE 8010±01±M corporations to become members of the BILLING CODE 8010±01±M Exchange. The proposed rule change would allow entities with new Issuer Delisting; Notice of Application organizational structures similar to to Withdraw From Listing and Issuer Delisting; Notice of Application partnerships and corporations to Registration; (Ensco International to Withdraw From Listing and become Exchange member firms. As in Incorporated, Common Shares, $.10 Registration; (International Tourist the case of an individual, partnership, Par Value) File No. 1±8097 Entertainment Corporation, Common or corporation applying for Stock, $.001 Par Value) File No. 1± membership, the new entity will be January 2, 1996. 13532 subject to all other requirements for ENSCO International Incorporated membership approval. (‘‘Company’’) has filed an application January 2, 1996. with the Securities and Exchange The Commission also believes that the International Tourist Entertainment proposed rule change reasonably Commission (‘‘Commission’’), pursuant to Section 12(d) of the Securities Corporation (‘‘Company’’) has filed an balances the Exchange’s interest in Exchange Act of 1934 (‘‘Act’’) and Rule application with the Securities and having the flexibility to approve entities 12d2–2(d) promulgated thereunder, to Exchange Commission (‘‘Commission’’), with new organizational structures for withdraw the above specified security pursuant to Section 12(d) of the Exchange membership with the (‘‘Security’’) from listing and Securities Exchange Act of 1934 (‘‘Act’’) regulatory interests in protecting the registration on the American Stock and Rule 12d2–2(d) promulgated financial and structural integrity of a Exchange Inc. (‘‘Amex’’). thereunder, to withdraw the above member firm. For example, although the The reasons alleged in the application specified security (‘‘Security’’) from proposed rule change permits the for withdrawing the Security from listing and registration on the Boston Exchange to approve LLCs, LLPs, listing and registration include the Stock Exchange, Inc. (‘‘BSE’’). business trusts, or other organizational following: According to the Company, The reasons alleged in the application structures with characteristics of in addition to being listed on the Amex, corporations or partnerships as member the Security is listed on the New York for withdrawing the Security from firms, the Phlx will review each Stock Exchange, Inc. (‘‘NYSE’’). The listing and registration include the Exchange member organization Security commenced trading on the following: application on a case-by-case basis, and NYSE at the opening of business on (1) To avoid the duplication or fees prior to approving any such entity for December 20, 1995 and concurrently from trading on both NASDAQ and the membership, the Exchange must be therewith such stock will suspend from BSE; satisfied that: (1) Such entity would be trading on the Amex. In making the (2) It is no longer necessary for blue structured in such a format that would decision to withdraw the Security from sky purposes for the company to be qualify as a broker or dealer registered listing on the Amex, the Company listed on the BSE; and with the Commission pursuant to the considered the direct and indirect costs Act; (2) the Phlx would legally have and expenses attendant with (3) The Company has received no appropriate jurisdiction over such maintaining the dual listing of the benefit from trading on both exchanges. entity; and (3) the permanency of such Security on the NYSE and on the Amex. The Security will continue to trade on entity’s capital is consistent with that The Company does not see any the Nasdaq. required of other member firms. 11 particular advantage in the dual trading Finally, the Commission believes that, of the Security and believes that dual Any interested person may, on or consistent with Section 6(d)(1) of the listing would fragment the market for before January 24, 1996, submit by letter Act, the proposed rule change will the Security. to the Secretary of the Securities and enhance the Exchange’s ability to Any interested person may, on or Exchange Commission, 450 Fifth Street, enforce compliance by its members and before January 24, 1996, submit by letter N.W., Washington, D.C. 20549, facts persons associated with its members to the Secretary of the Securities and bearing upon whether the application with the rules of the Exchange by Exchange Commission, 450 Fifth Street has been made in accordance with the making provisions in the Phlx By-Laws NW., Washington, DC 20549, facts rules of the BSE and what terms, if any, and rules that pertain to general, special bearing upon whether the application should be imposed by the Commission or limited partners in partnership has been made in accordance with the for the protection of investors. The member firms applicable, as rules of the exchanges and what terms, Commission, based on the information appropriate, to those persons who if any, should be imposed by the submitted to it, will issue an order perform essentially similar functions as Commission for the protection of granting the application after the date such partners in non-partnership investors. The Commission, based on mentioned above, unless the member firms. the information submitted to it, will Commission determines to order a hearing on the matter. 10 15 U.S.C. 78f(c). 12 15 U.S.C. 78s(b)(2). 11 See Amendment No. 2, supra note 4. 13 17 CFR 200.30–3(a)(12). 570 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices

For the Commission, by the Division of Applicant’s Representations 6. On December 31, 1993, Class A and Market Regulation, pursuant to delegated Class B liquidated, and securityholders authority. 1. Applicant is an open-end, non- diversified management investment received the net asset value of their Jonathan G. Katz, company formed as a trust under New interests. Class C merger into World Secretary. York law. Applicant is a ‘‘master fund’’ Income Fund on December 30, 1993. [FR Doc. 96–201 Filed 1–5–96; 8:45 am] in a ‘‘master/feeder fund’’ complex and Class C assets were exchanged for shares BILLING CODE 8010±01±M is composed of three funds: Short-Term of the World Income Fund and those World Income Fund, Class A, B and C. shares were distributed pro rata to Class Class A and Class B are a series of Van C shareholders. [Investment Company Act Release No. Eck Trust. Class C is a series of Van Eck 7. The Adviser paid applicant’s 21664; 811±6582] Funds. unamortized organization expenses and 2. SEC records indicate that applicant the expenses relating to applicant’s Worldwide Short-Term Trust; registered under the Act on March 3, liquidation. No brokerage commissions Application for Deregistration 1992 by filing a notification of were paid in connection with the liquidation. January 2, 1996. registration on Form N–8A pursuant to section 8(a) of the Act. Also on that 8. Applicant has no securityholders, AGENCY: Securities and Exchange assets, or liabilities. Applicant is not a Commission (‘‘SEC’’). date, applicant filed a registration statement on Form N–1A pursuant to party to any litigation or administrative ACTION: Notice of Application for section 8(b) of the Act. No registration proceeding. Applicant is not presently Deregistration under the Investment was made under the Securities Act of engaged, nor does it propose to engage, Company Act of 1940 (the ‘‘Act’’). 1933 (the ‘‘Securities Act’’) because in any business activities other than applicant’s beneficial interests were those necessary for the winding up of its APPLICANT: Worldwide Short-Term affairs. Trust. issued solely in private placement transactions that did not involve any 9. Applicant will file a Certificate of RELEVANT ACT SECTION: Section 8(f). ‘‘public offering’’ within the meaning of Dissolution and other appropriate SUMMARY OF APPLICATION: Applicant section 4(2) thereof. All of applicant’s documentation in New York, as seeks an order declaring that it has investors were ‘‘accredited investors’’ required by New York law. ceased to be an investment company. within the meaning of Regulation D For the SEC, by the Division of Investment FILING DATES: The application on Form under the Securities Act. Management, under delegated authority. N–8F was filed on August 14, 1995, and 3. At a meeting held on November 23, Margaret H. McFarland, was amended on October 5, 1995, 1993, applicant’s board of trustees Deputy Secretary. December 4, 1995, and December 21, approved a plan to liquidate Class A [FR Doc. 96–181 Filed 1–5–96; 8:45 am] 1995. and Class B, and merge Class C into BILLING CODE 8010±01±M HEARING OR NOTIFICATION OF HEARING: An World Income Fund, another series of order granting the application will be Van Eck Funds. Applicant’s proxy issued unless the SEC orders a hearing. materials indicate that applicant DEPARTMENT OF TRANSPORTATION Interested persons may request a liquidated because sales of applicant’s hearing by writing to the SEC’s shares dropped dramatically and Aviation Proceedings; Agreements Secretary and serving applicant with a because a high level of redemptions Filed During the Week Ending 12/29/95 over the previous year meant that copy of the request, personally or by The following agreements were filed mail. Hearing requests should be applicant’s expense ratio was higher than anticipated. with the Department of Transportation received by the SEC by 5:30 p.m. on under the provisions of 49 U.S.C 412 January 29, 1996, and should be 4. Both applicant and World Income Fund are advised by Van Eck Associates and 414. Answers may be filed within accompanied by proof of service on 21 days of date of filing. applicant, in the form of an affidavit or, Corporation (‘‘Adviser’’). Consequently, for lawyers, a certificate of service. applicant relied on the exemption Docket Number: OST–95–974 Date filed: December 27, 1995 Hearing requests should state the nature provided by rule 17a–8 under the Act to Parties: Members of the International of the writer’s interest, the reason for the effect the merger of Class C into the 1 Air Transport Association request, and the issues contested. World Income Fund. In accordance Subject: Persons who wish to be notified of a with rule 17a–8, the trustees determined TC23 Reso/P 0718 dated November hearing may request notification by that the merger was in the best interests 24, 1995 writing to the SEC’s Secretary. of the shareholders of Class C and the World Income Fund, and that the Europe-Japan/Korea Resos r–1–R–43 ADDRESSES: Secretary, SEC, 450 5th interests of the World Income Fund’s Intended effective date: April 1, 1996 Street NW., Washington, DC 20549. shareholders would not be diluted as a Docket Number: OST–95–975 Applicant, 122 East 42nd Street, New result of the merger. Date filed: December 27, 1995 York, New York 10168. 5. Proxy materials were filed with the Parties: Members of the International FOR FURTHER INFORMATION CONTACT: SEC and mailed to shareholders for a Air Transport Association Sarah A. Buescher, Staff Attorney, at shareholders meeting held on December Subject: (202) 942–0573, or Alison E. Baur, 28, 1993. Applicant’s shareholders TC23 Reso/P 0727 dated December 5, Branch Chief, at (202) 942–0564 (Office approved the liquidation plan at the 1995 of Investment Company Regulation, meeting. Europe-South West Pacific Resos r–1– Division of Investment Management). R–29 SUPPLEMENTARY INFORMATION: The 1 Rule 17a–8 provides relief from the affiliated Intended effective date: April 1, 1996 following is a summary of the transaction prohibition of section 17(a) of the Act Docket Number: OST–95–976 for a merger of investment companies that may be application. The complete application affiliated persons of each other solely by reason of Date filed: December 27, 1995 may be obtained for a fee at the SEC’s having a common investment adviser, common Parties: Members of the International Public Reference Branch. directors, and/or common officers. Air Transport Association Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices 571

Subject: amend its foreign air carrier permit to for the meeting consists of the following TC2 Reso/P 1842 dated November 17, authorize JAL to engage in, in items: 1995 r–1–16 addition to its existing permit (1) Presentation of the minutes from TC2 Reso/P 1843 dated November 17, authority, scheduled foreign air the December 11, 1995 full Committee 1995 r–17–37 transportation of persons, property, meeting. TC2 Reso/P 1844 dated November 17, and mail between Sendai, Japan, and (2) Subcommittee Reports. 1995 r–38–57 Honolulu, Hawaii. (3) Industrial Lock Replacement. TC2 Reso/P 1845 dated November 17, Docket Number: OST–95–973 (4) Underkeel Clearance. 1995 r–58–81 Date filed: December 26, 1995 Dated: December 20, 1995. TC2 Reso/P 1846 dated November 17, Due Date for Answers, Conforming R. C. North, 1995 r–82–97 Applications, or Motion to Modify Rear Admiral, U.S. Coast Guard, Eighth Coast TC2 Reso/P 1847 dated November 17, Scope: January 23, 1996 Guard District. 1995 r–98–99 Description: Application of Japan [FR Doc. 96–206 Filed 1–5–96; 8:45 am] TC2 Reso/P 1848 dated November 17, Airlines Company, Ltd., pursuant to BILLING CODE 4910±14±M 1995 r–100 49 U.S.C. Section 41304(a), applies to Europe-Africa Resolutions amend its foreign air carrier permit to Intended effective date: April 1, 1996 authorize JAL to engage in, in Federal Aviation Administration Paulette V. Twine, addition to its existing permit Chief, Documentary Services Division. authority, scheduled foreign air Aviation Rulemaking Advisory [FR Doc. 96–215 Filed 1–5–96; 8:45 am] transportation of persons, property, Committee Meeting on Aircraft BILLING CODE 4910±62±P and mail between Tokyo, Japan and Certification Procedures Issues Kailua-Kona, Hawaii. AGENCY: Federal Aviation Paulette V. Twine, Administration (FAA), DOT. Notice of Applications for Certificates Chief, Documentary Services Division. ACTION: Notice of meeting. of Public Convenience and Necessity [FR Doc. 96–216 Filed 1–5–96; 8:45 am] and Foreign Air Carrier Permits Filed BILLING CODE 4910±62±P SUMMARY: The FAA is issuing this notice Under Subpart Q During the Week to advise the public of a meeting of the Ending December 29, 1995 Federal Aviation Administration’s The following Applications for Coast Guard Aviation Rulemaking Advisory Committee to discuss aircraft Certificates of Public Convenience and [CGD08±96±029] Necessity and Foreign Air Carrier certification procedures issues. Permits were filed under Subpart Q of Lower Mississippi River Waterway DATES: The meeting will be held on the Department of Transportation’s Safety Advisory Committee January 18, 1996, at 9:00 a.m. Arrange Procedural Regulations (See 14 CFR for oral presentations by January 12, 302.1701 et seq.). The due date for AGENCY: Coast Guard, DOT. 1996. Answers, Conforming Applications, or ACTION: Notice of meeting. ADDRESSES: The meeting will be held at Motions to modify Scope are set forth the General Aviation Manufacturers SUMMARY: The Lower Mississippi River below for each application. Following Association, Suite 801, 1400 K Street Waterway Safety Advisory Committee the Answer period DOT may process the NW., Washington, DC 20005. application by expedited procedures. will meet to discuss various navigation safety matters affecting the Lower FOR FURTHER INFORMATION CONTACT: Such procedures may consist of the Jeanne Trapani, Office of Rulemaking adoption of a show-cause order, a Mississippi River area. The meeting will be open to the public. (ARM–208), 800 Independence Avenue tentative order, or in appropriate cases SW., Washington, DC 20591, telephone DATES: a final order without further The meeting will be held from 9 (202) 267–7624. proceedings. a.m. to approximately 11 a.m. on Tuesday, April 16, 1996. SUPPLEMENTARY INFORMATION: Pursuant Docket Number: OST–95–969 to section 10(a)(2) of the Federal ADDRESSES: Date filed: December 26, 1995 The meeting will be held in Advisory Committee Act (Pub. L. 92– Due Date for Answers, Conforming the 11th floor conference room of the 463; 5 U.S.C. App. II), notice is hereby Applications, or Motion to Modify Hale Boggs Federal Building, 501 given of a meeting of the Aviation Scope: January 23, 1996 Magazine Street, New Orleans, Rulemaking advisory committee to be Description: Application of Northwest Louisiana. held on January 18, 1996, at the General Airlines, Inc., pursuant to 49 U.S.C. FOR FURTHER INFORMATION CONTACT: Mr. Aviation Manufacturers Association, Section 41102 and Subpart Q of the Monty Ledet, USCG, Recording Suite 801, 1400 K Street NW., Regulations, applies for a certificate of Secretary, Lower Mississippi River Washington, DC 20005. The agenda for public convenience and necessity Waterway Safety Advisory Committee, the meeting will include: authorizing Northwest to provide c/o Commander, Eighth Coast Guard • Opening Remarks scheduled foreign air transportation of District (oan), Room 1211, Hale Boggs • Working Group Reports persons, property and mail between Federal Building, 501 Magazine Street, Production Certification Detroit, Michigan and Beijing, China. New Orleans, LA 70130–3396, Parts Docket Number: OST–95–972 telephone (504) 589–4686. Delegation System Date filed: December 26, 1995 SUPPLEMENTARY INFORMATION: Notice of ELT ICPTF Due Date for Answers, Conforming this meeting is given pursuant to the • Applications, or Motion to Modify Federal Advisory Committee Act, 5 New Business Scope: January 23, 1996 U.S.C. App. 2 § 1 et seq. The meeting is Attendance is open to the interested Description: Application of Japan open to the public. Members of the public, but will be limited to the space Airlines, Company, Ltd., pursuant to public may present written or oral available. The public must make 49 U.S.C. Section 41304(a), applies to statements at the meeting. The agenda arrangements by January 12, 1996, to 572 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices present oral statements at the meeting. • Status report from the FAR/JAR Privilege. The FAA is currently The public may present written Harmonization Working Group for evaluating whether further changes may Propeller-Driven Small Airplanes statements to the committee at any time • be warranted and the possible impact of by providing 25 copies of the Assistant Status Report from the FAR/JAR a more extensive criminal history check Harmonization Working Group for Executive Director for Aircraft Subsonic Transport Category Large requirement. Certification Procedures or by bringing Airplanes and Subsonic Turbojet Attendance at the January 23, 1996, the copies to him at the meeting. Powered Airplanes meeting is open to the public but is Arrangements may be made by • A discussion of future meeting dates, limited to space available. Members of contacting the person listed under the activities, and plans. the public may address the committee heading FOR FURTHER INFORMATION • Adjourn only with the written permission of the CONTACT. Attendance is open to the interested chair, which should be arranged in Sign and oral interpretation can be public, but will be limited to the space advance. The chair may entertain public made available at the meeting, as well available. The public must make comment if, in its judgment, doing so as an assistive listening device, if arrangements by January 17, 1996, to will not disrupt the orderly progress of requested 10 calendar days before the present oral statements at the meeting. the meeting and will not be unfair to meeting. The public may present written any other person. Members of the public Issued in Washington, DC, on January 2, statements to the committee at any time are welcome to present written material 1996. by providing 25 copies to the Executive to the committee at any time. Persons Elizabeth Yoest, Director, or by bringing the copies to wishing to present statement or obtain Acting Assistant Executive Director, Aviation him at the meeting. In addition, sign information should contact the Office of Rulemaking Advisory Committee for Aircraft and oral interpretation can be made the Associate Administrator for Civil Certification Procedures. available at the meeting, as well as an Aviation Security, 800 Independence [FR Doc. 96–225 Filed 1–5–96; 8:45 am] assistive listening device, if requested Avenue SW., Washington, DC 20591. BILLING CODE 4910±13±M 10 calendar days before the meeting. Telephone 202–267–7451. Arrangements may be made by Issued in Washington, DC on January 2, contacting the person listed under the 1996. Aviation Rulemaking Advisory heading FOR FURTHER INFORMATION Karl Shrum, Committee Meeting on Noise CONTACT. Certification Issues Manager, Civil Aviation Security Division. Issued in Washington, DC, on January 2, [FR Doc. 96–227 Filed 1–5–96; 8:45 am] AGENCY: Federal Aviation 1996. BILLING CODE 4910±13±M Administration (FAA), DOT. Paul R. Dykeman, ACTION: Notice of meeting. Assistant Executive Director for Noise Certification Issues, Aviation Rulemaking DEPARTMENT OF THE TREASURY SUMMARY: The FAA is issuing this notice Advisory Committee. to advise the public of a meeting of the [FR Doc. 96–226 Filed 1–5–96; 8:45 am] Departmental Offices; Debt Federal Aviation Administration BILLING CODE 4910±03±M Management Advisory Committee; Aviation Rulemaking Advisory Meeting Committee to discuss noise certification issues. Aviation Security Advisory Committee; Notice is hereby given, pursuant to 5 DATES: The meeting will be held on Meeting U.S.C. App. § 10(a)(2), that a meeting January 24, 1996, at 9 a.m. Arrange for will be held at the U.S. Treasury AGENCY: Federal Aviation oral presentations by January 17, 1996. Department, 15th and Pennsylvania Administration, DOT. ADDRESSES: The meeting will be held at Avenue, NW., Washington, DC., on SUMMARY: the General Aviation Manufacturers Notice is hereby given of a January 30 and 31, 1996, of the Association, suite 801, 1400 K Street scheduled meeting of the Aviation following debt management advisory NW., Washington, DC 20005. Security Advisory Subcommittee on committee: Public Securities Policy, Procedures, and Public FOR FURTHER INFORMATION CONTACT: Association, Treasury Borrowing Carolina Forrester, Federal Aviation Awareness. Advisory Committee. Administration, Office of Rulemaking DATE: The meeting will be held January The agenda for the meeting provides (ARM–206), 800 Independence Avenue 23, 1996, from 10 a.m. to 12 p.m. for a technical background briefing by SW., Washington, DC 20591, telephone ADDRESS: The meeting will be held in Treasury staff on January 30, followed (202) 267–9690; fax (202) 267–5075. Room 8C on the eighth floor, Federal by a charge by the Secretary of the SUPPLEMENTARY INFORMATION: Pursuant Aviation Administration, 800 Treasury or his designate that the to § 10(a)(2) of the Federal Advisory Independence Avenue SW., committee discuss particular issues, and Committee Act (Pub. L. 92–463; 5 U.S.C. Washington, DC 20591, telephone 202– a working session. On January 31, the App. II), notice is hereby given of a 267–7451. committee will present a written report meeting of the Aviation Rulemaking SUPPLEMENTARY INFORMATION: Pursuant of its recommendations. Advisory Committee to be held on to section 10(a)(2) of the Federal The background briefing by Treasury January 24, 1996, at the General Advisory Committee Act (Pub. L. 92– staff will be held at 11:30 a.m. Eastern Aviation Manufacturers Association, 463; 5 U.S.C. App. 11), notice is hereby time on January 30 and will be open to Suite 801, 1400 K Street NW., given of a meeting of the Aviation the public. The remaining sessions on Washington, DC 20005. The agenda will Security Advisory Subcommittee to be January 30 and the committee’s include: held January 23, 1996, in Room 8C on reporting session on January 31 will be the eighth floor, Federal Aviation closed to the public, pursuant to 5 • Opening Remarks • Committee administration Administration, 800 Independence U.S.C. App. § 10(d). • Status report from the FAR/JAR Avenue SW., Washington, DC. The This notice shall constitute my Harmonization Working Group for agenda for the meeting will include the determination, pursuant to the authority Helicopters Final Rule on Unescorted Access placed in heads of departments by 5 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Notices 573

U.S.C. App. § 10(d) and vested in me by ACTION: General notice. as of January 1, 1996, the IPR Branch in Treasury Department Order No. 101–05, the Office of Regulations & Rulings will that the closed portions of the meeting SUMMARY: This notice advises the public no longer issue paper circulars and are concerned with information that is that the Intellectual Property Rights directives concerning trademark and exempt from disclosure under 5 U.S.C. (IPR) Branch of Customs will no longer copyright recordations; the ACS/IPR notify Customs officers and the public § 552b(c)(9)(A). The public interest module will become the sole tool for of trademark and copyright recordations requires that such meetings be closed to basic consultation on those matters. the public because the Treasury through the issuance of paper circulars Department requires frank and full or directives, but rather that all such As to the public availability of advice from representatives of the future notifications will be recordations, use of the Customs financial community prior to making its accomplished by means of the IPR Electronic Bulletin Board final decision on major financing module developed for the Automated (CEBB)(‘‘Help’’ number (703) 440–6236) operations. Historically, this advice has Commercial System (ACS). Customs is encouraged. Text on the CEBB been offered by debt management will furnish a print screen of the first identifies the recorded trademark or advisory committees established by the page of IPR module text and a video copyright, its owner, a contact person, several major segments of the financial image to interested members of the and whether the trademark or copyright community. When so utilized, such a public upon request. receives so-called ‘‘gray market’’ import committee is recognized to be an EFFECTIVE DATE: January 1, 1996. restriction. On a monthly basis, advisory committee under 5 U.S.C. App. FOR FURTHER INFORMATION CONTACT: John beginning with the July 17, 1991, § 3. F. Atwood, Chief, Intellectual Property edition, the Customs Bulletin has Although the Treasury’s final Rights Branch, Office of Regulations and published a brief reference of all announcement of financing plans may Rulings, (202) 482–6960. trademark and copyright recordations not reflect the recommendations (including all those recorded prior to SUPPLEMENTARY INFORMATION: provided in reports of the advisory July 17, 1991 ). Upon request, Customs committee, premature disclosure of the Background officers will furnish a print screen of the committee’s deliberations and reports first page of IPR module text for a would be likely to lead to significant Prior to creating the Intellectual Property Rights (IPR) Task Force and trademark or copyright with any financial speculation in the securities references to licensees in recordations market. Thus, these meetings fall within IPR Branch, the principal vehicle for prior to January 1, 1996, deleted. the exemption covered by 5 U.S.C. notifying Customs officers and the Beginning on January 1, 1996, § 552b(c)(9)(A). public of trademark and copyright The Office of the Under Secretary for recordations was through the issuance recordation texts will not include Domestic Finance is responsible for of paper ‘‘circulars’’ or ‘‘directives’’. licensee information on the first page maintaining records of debt During 1989–1990, an IPR module was (not all recordations show licensees). management advisory committee developed for the Automated Since video images are not currently meetings and for providing annual Commercial System (ACS) and the basic available through the CEBB, Customs reports setting forth a summary of information and images on all officers will provide a relevant image committee activities and such other outstanding recordations transferred to upon request from the public. that program, along with the addition of matters as may be informative to the In addition to financial savings, by public consistent with the policy of 5 all new recordations. Currently, that narrowing the administration of U.S.C. § 552b. database is approaching 20,000 and more than 1,500 new recordations are trademark and copyright recordations to Dated: December 26, 1995. added each year. the one automated system, this will John D. Hawke, Jr., A comparative analysis of the existing permit the IPR Branch to concentrate on Under Secretary, Domestic Finance. paper recordation notification system improving and refining the ACS/IPR [FR Doc. 96–189 Filed 1–5–96; 8:45 am] with the paperless ACS/IPR module module. Substantive questions about BILLING CODE 4810±25±M indicates that substantial monetary disclosure and IPR recordations should savings and increased efficiency will be directed to the IPR Branch at (202) result by eliminating the paper system. 482–6960. Customs Service Because of the ongoing conversion to Dated: January 2, 1996. Paperless Notification Concerning the Local Area Networks (LANs), Customs officers now have the ability to call up Michael H. Lane, Recordation of Intellectual Property Acting Commissioner of Customs. Rights Information both the text and images (in the case of word trademarks, an image may not be [FR Doc. 96–204 Filed 1–5–96; 8:45 am] AGENCY: Customs Service, Treasury. entered into the system). Accordingly, BILLING CODE 4820±02±P 574

Sunshine Act Meetings Federal Register Vol. 61, No. 5

Monday, January 8, 1996

This section of the FEDERAL REGISTER FOR FURTHER INFORMATION CONTACT: PLACE: USEC Corporate Headquarters, contains notices of meetings published under Floyd Fithian, Secretary to the Farm 6903 Rockledge Drive, Bethesda, the ``Government in the Sunshine Act'' (Pub. Credit Administration Board, (703) 883– Maryland 20817. L. 94-409) 5 U.S.C. 552b(e)(3). 4025, TDD (703) 883–4444. STATUS: Portions of the meeting will be ADDRESSES: Farm Credit closed to the public. FARM CREDIT ADMINISTRATION Administration, 1501 Farm Credit Drive, McLean, Virginia 22102–5090. MATTERS TO BE CONSIDERED: Farm Credit Administration Board; • Regular Meeting Dated: January 3, 1996. Review of commercial and financial issues of the Corporation SUMMARY: Notice is hereby given, Floyd Fithian, pursuant to the Government in the Secretary, Farm Credit Administration Board. CONTACT PERSON FOR MORE INFORMATION: Sunshine Act (5 U.S.C. 552b(e)(3)), that [FR Doc. 96–289 Filed 1–4–96; 2:13 pm] Barbara Arnold, 301–564–3354. the January 11 and February 8, 1996 BILLING CODE 6705±01±P Dated: January 4, 1996. regular meetings of the Farm Credit Administration Board (Board) will not William H. Timbers, Jr. be held and that a special meeting of the UNITED STATES ENRICHMENT CORPORATION President and Chief Executive Officer Board is scheduled for Tuesday, BOARD OF DIRECTORS [FR Doc. 96–294 Filed 1–4–96; 2:14 pm] February 13, 1996 at 10:00 a.m. An BILLING CODE 8720±01±M agenda for this meeting will be TIME AND DATE: 9:15 a.m., Tuesday, published at a later date. January 9, 1996. 575

Corrections Federal Register Vol. 61, No. 5

Monday, January 8, 1996

This section of the FEDERAL REGISTER SECURITIES AND EXCHANGE Tuesday, December 26, 1995, make the contains editorial corrections of previously COMMISSION following correction: published Presidential, Rule, Proposed Rule, and Notice documents. These corrections are [Release No. 34-36569; File No. SR-CSE- On page 66819, in the second column, prepared by the Office of the Federal 95-10] the signature was inadvertently omitted Register. Agency prepared corrections are before the FR Doc. line. It should read issued as signed documents and appear in Self-Regulatory Organizations; Notice as follows: of Filing of Proposed Rule Change by the appropriate document categories Margaret H. McFarland, elsewhere in the issue. Cincinnati Stock Exchange, Inc., Relating to the Definitions of Public Deputy Secretary. and Professional Agency Orders BILLING CODE 1505±01±D SECURITIES AND EXCHANGE Correction COMMISSION In notice document 95–30530 DEPARTMENT OF THE TREASURY [Release No. 34-36566; File No. SR-Amex- beginning on page 64465 in the issue of 95-46] Friday, December 15, 1995, the Release Office of Thrift Supervision number should read as set forth above. Self-Regulatory Organizations; Notice BILLING CODE 1505±01±D 12 CFR Parts 506, 510, 512, 516, 543, of Filing of Proposed Rule Change by 544, 545, 550, 552, 556, 563, 563b, 563c, the American Stock Exchange, Inc. 563d, 565, 566, 567, 571, 574, 575, 583, Relating to the Exchange's Arbitration SECURITIES AND EXCHANGE 584 Rules COMMISSION Correction [Release No. 34-36601; File No. SR-PHLX- [No. 95-200] In notice document 95–30492 95-39] Technical Amendments; Loans to One beginning on page 64191 in the issue of Thursday, December 14, 1995, make the Self-Regulatory Organizations; Order Borrower Approving Proposed Rule Change by following correction: Correction On page 64192, in the first column, the Philadelphia Stock Exchange, Inc., the signature was inadvertently omitted Relating to Increasing the Maximum In rule document 95–30541 beginning Size of Options Orders Eligible for before the FR Doc. line. It should read on page 66714 in the issue of Tuesday, Automatic Execution as follows: December 26, 1995, in the first column, Margaret H. McFarland, Correction the EFFECTIVE DATE should read Deputy Secretary. In notice document 95–31219 ‘‘December 26, 1995’’. BILLING CODE 1505±01±D beginning on page 66817 in the issue of BILLING CODE 1505±01±D federal register January 8,1996 Monday Instruments, etc.;ProposedRule Policies forDerivativeFinancial Securities: DisclosureofAccounting 17 CFRParts210,228,etal. Commission Exchange Securities and Part II 577 578 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules

SECURITIES AND EXCHANGE ADDRESSES: Comments should be Commission recognizes that these COMMISSION submitted in triplicate to Jonathan G. instruments can be effective tools for Katz, Secretary, Securities and Exchange managing registrants’ exposures to 17 CFR Parts 210, 228, 229, 239, 240, Commission, 450 Fifth Street, N.W., market risk.11 During 1994, however, and 249 Washington, D.C. 20549. Comment some registrants experienced letters should refer to File No. S7–35– significant, and sometimes unexpected, [Release Nos. 33±7250; 34±36643; IC± 95. All comments received will be losses in market risk sensitive 21625; File No. S7±35±95]. available for public inspection and instruments due to, among other things, copying in the Commission’s Public changes in interest rates, foreign RIN 3235±AG42 Reference Room, 450 Fifth Street, N.W., currency exchange rates, and Washington, D.C. 20549. commodity prices. In light of these Proposed Amendments to Require FOR FURTHER INFORMATION CONTACT: losses and the substantial growth in the Disclosure of Accounting Policies for use of market risk sensitive instruments, Derivative Financial Instruments and Cathy J. Cole, Thomas J. Linsmeier, Russell B. Mallett, III, or Stephen M. public disclosure about these Derivative Commodity Instruments and instruments has emerged as an Disclosure of Qualitative and Swad, at (202) 942–4400, Office of the Chief Accountant, Securities and important issue in financial markets. Quantitative Information About Market Exchange Commission, 450 Fifth Street, During 1994 and 1995, to understand Risk Inherent in Derivative Financial N.W., Mail Stop 11–3, Washington, D.C. better this emerging issue and to assess Instruments, Other Financial 20549, or Kurt R. Hohl, at (202) 942– current disclosure practice, the SEC staff Instruments, and Derivative 2960, Division of Corporation Finance, reviewed annual reports filed with the Commodity Instruments Securities and Exchange Commission, Commission by approximately 500 AGENCY: Securities and Exchange 450 Fifth Street, N.W., Mail Stop 3–13, registrants. The primary purposes of Commission. Washington, D.C. 20549. these reviews were to (i) assess the quality of disclosures pertaining to ACTION: Proposed amendments. SUPPLEMENTARY INFORMATION: The Commission is proposing to amend Rule market risk sensitive instruments and SUMMARY: The Securities and Exchange 4–08 of Regulation S–X 1 and to add (ii) determine what, if any, additional Commission (‘‘Commission’’ or ‘‘SEC’’) new Item 305 to Regulation S–K.2 information is needed to improve today is soliciting comment on Additionally, the Commission is disclosures about these instruments. proposed amendments to Regulation S– proposing amendments to Forms S–1, The SEC staff observed that while X, Regulation S–K, and various forms, S–2, S–4, S–11, and F–4 3 under the disclosures reviewed in 1995 were more including Form 20–F. The proposed Securities Act of 1933,4 and Rule 14a– informative than those reviewed in amendments are intended to clarify and 3,5 Schedule 14A,6 and Forms 10, 20– 1994, in part, because of improved 12 expand existing requirements for F, 10–Q, and 10–K 7 under the Securities guidance by the FASB, three financial statement footnote disclosures Exchange Act of 1934.8 about registrants’ accounting policies for (1) derivative financial instruments include futures, I. Executive Summary forwards, swaps, options, and other financial derivative financial instruments, as instruments with similar characteristics, (2) other defined, and derivative commodity During the last several years, there has financial instruments include, for example, instruments, as defined. In addition, the been substantial growth 9 in the use of investments, loans, structured notes, mortgage- derivative financial instruments, other backed securities, indexed debt instruments, proposed amendments require interest-only and principal-only obligations, disclosure outside the financial financial instruments, and derivative deposits, and other debt obligations, and (3) 10 statements of qualitative and commodity instruments. The derivative commodity instruments include, to the quantitative information about market extent such instruments are not derivative financial 1 instruments, commodity futures, commodity risk inherent in derivative financial 17 CFR 210.4–08. Item 310 of Regulation S–B, CFR 228.310, also would be amended to incorporate forwards, commodity swaps, commodity options, instruments, other financial the changes to Item 4–08 of Regulation S–X. and other commodity instruments with similar instruments, as defined, and derivative 2 17 CFR Part 229. characteristics that are reasonably possible to be settled in cash or with another financial instrument. commodity instruments. Also, the 3 17 CFR 239.11, 12, 25, 18, and 34. In addition, for purposes of this release, the terms 4 release reminds registrants that when 15 U.S.C. 77a et seq. (1) ‘‘derivatives’’ refer to derivative financial they provide disclosure about financial 5 17 CFR 240.14a–3. instruments and derivative commodity instruments, instruments, commodity positions, firm 6 17 CFR 240.14a–101. together, and (2) ‘‘market risk sensitive 7 commitments, and other anticipated 17 CFR 249.210, 220f, 308a, and 310. instruments’’ refer to derivative financial 8 15 U.S.C. 78a et seq. instruments, other financial instruments, and transactions (‘‘reported items’’), such 9 The worldwide notional/contract amounts for derivative commodity instruments, collectively. disclosure must include disclosures derivative financial instruments and derivative 11 Market risk is the risk of loss arising from about derivatives that affect directly or commodity instruments increased from $7.1 trillion adverse changes in market rates and prices, such as indirectly such reported items, to the in 1989 to $62.1 trillion in 1994. These notional interest rates, foreign currency exchange rates, amounts, while one way to measure derivative commodity prices, and similar market rate or price extent the effects of such information activities, do not represent a precise measure of the changes (e.g., equity prices). See Group of Thirty, are material and necessary to prevent risk associated with these instruments. In many ‘‘Derivatives: Practices and Principles’’ (July 1993), the disclosure about the reported item instances, the amount at risk is much smaller than and Financial Accounting Standards Board from being misleading. In sum, these the notional amount. See Financial Derivatives: (‘‘FASB’’), Statement of Financial Accounting Actions Needed to Protect the Financial System, Standards No. 105, ‘‘Disclosure of Information proposals are designed to make United States General Accounting Office Report to about Financial Instruments with Off-Balance-Sheet information about derivative financial Congressional Requesters (May 1994), and Public Risk and Financial Instruments with Concentrations instruments, other financial Disclosure of the Trading and Derivatives Activities of Credit Risk’’ (‘‘FAS 105’’) (March 1990), for instruments, and derivative commodity of Banks and Securities Firms, Basle Committee on similar definitions of market risk. Banking Supervision (‘‘Basle Committee’’) and the 12 In October 1994, the FASB issued Statement of instruments more useful to investors Technical Committee of the International Financial Accounting Standards No. 119, seeking to assess the market risk Organization of Securities Commissions (‘‘IOSCO’’) ‘‘Disclosures about Derivative Financial inherent in these instruments. (November 1995). Instruments and Fair Value of Financial 10 See section IV C, infra, for complete definitions Instruments’’ (‘‘FAS 119’’) (October 1994), which DATES: Comments on the proposed of the terms derivative financial instruments, other requires disclosures about derivative financial amendments should be received on or financial instruments, and derivative commodity instruments. FAS 119 is effective for fiscal years before May 7, 1996. instruments. In brief, for purposes of this release: ending after December 15, 1994, except for entities Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 579 significant disclosure issues remain. a. In complying with the proposed Congress recently adopted the Private Today, to address those disclosure amendments requiring disclosure of Securities Litigation Reform Act of 1995 issues: 13 quantitative information about market that, among other things, amends the 1. The Commission proposes risk, registrants would be permitted to Securities Act and Securities Exchange amendments to Regulation S–X select any one of the following three Act to include a safe harbor for forward requiring enhanced descriptions in the disclosure alternatives: looking information. It is the footnotes to the financial statements of i. Tabular presentation of expected Commission’s intention that forward accounting policies for derivative future cash flow amounts and related looking disclosures made pursuant to financial instruments and derivative contract terms categorized by expected proposed Item 305 of Regulation S–K commodity instruments.14 These maturity dates; and Item 9A of Form 20–F be subject to disclosures would be required unless ii. Sensitivity analysis expressing the an appropriate safe harbor. The the registrant’s derivative activities are possible loss in earnings, fair values, or Commission’s staff is continuing to not material. For this proposal, the cash flows of market risk sensitive consider how best to craft an materiality of derivatives activities instruments from selected hypothetical appropriate safe harbor in light of this would be measured by the fair values 15 changes in market rates and prices; or recent legislation, and the Commission of derivative financial instruments and iii. Value at risk disclosures intends to issue a release shortly that derivative commodity instruments at expressing the potential loss in would propose that the disclosures to be the end of each reporting period and the earnings, fair values, or cash flows of required by new Items 305 and 9A be fair value of those instruments during market risk sensitive instruments from made subject to safe harbor provisions. each reporting period. market movements over a selected The proposed amendments pertaining 2. The Commission proposes period of time with a selected likelihood to qualitative and quantitative amendments creating a new Item 305 of of occurrence. information about market risk would Regulation S–K requiring disclosure b. The proposed qualitative not apply to registered investment outside the financial statements 16 of information about market risk would companies 20 and small business qualitative and quantitative information include a narrative discussion of (i) a issuers.21 However, to the extent market about derivative financial instruments, registrant’s primary market risk risk represents a material known trend, other financial instruments, and exposures 18 and (ii) how the registrant event, or uncertainty, small business derivative commodity instruments. manages those exposures (e.g., a issuers, like other registrants, would be These disclosures would be required if description of the objectives, general required to discuss the impact of market any of the following items are material: strategies, and instruments, if any, used risk on past and future financial (i) the fair values of market risk to manage those exposures). condition and results of operations, sensitive instruments outstanding at the 3. The Commission is reminding pursuant to Commission rules relating end of the current reporting period or registrants that when they provide to MD&A.22 (ii) the potential loss in future earnings, disclosure about financial instruments, The proposed amendments are fair values, or cash flows of market risk commodity positions, firm designed to make disclosures about sensitive instruments from reasonably commitments, and other anticipated market risk sensitive instruments more possible market movements.17 transactions 19 (‘‘reported items’’), such useful to investors. They represent one disclosure must include information step by the Commission to improve with less than $150 million in total assets. For those about derivatives that affect directly or registrants’ disclosures about market entities, FAS 119 is effective for financial indirectly such reported items, to the risk sensitive instruments. The statements issued for fiscal years ending after Commission recognizes the evolving December 15, 1995. extent the effects of such information 13 The FASB currently is working on a project to are material and necessary to prevent nature of market risk sensitive improve accounting recognition and measurement the disclosure about the reported item instruments and intends to continue of derivatives. This release does not address from being misleading. For example, considering how best to address accounting recognition and measurement of disclosure issues relating to these derivatives, but focuses solely on disclosure issues when information is required to be related to derivatives and other financial disclosed in the footnotes to the instruments. In this regard, if the instruments. financial statements about interest rates proposals in this release are adopted, 14 These disclosure requirements do not relate to, and repricing characteristics of debt the Commission would anticipate for example, other financial instruments. obligations, registrants should include, reconsidering the effectiveness of those Accounting policy disclosure requirements for rules, as well as the need for additional these other instruments are prescribed by existing when material, disclosure of the effects generally accepted accounting principles and of derivatives. Similarly, summary proposals, after a period of five years. Commission guidance (see, e.g., Accounting information and disclosures in Principles Board Opinion No. 22, ‘‘Disclosure of II. Initiatives Regarding Disclosures Accounting Policies’’ (‘‘APB 22’’) (April 1972). Management’s Discussion and Analysis About Derivatives 15 (‘‘MD&A’’) about the cost of debt For purposes of this release, the term ‘‘fair Certain private sector entities have value’’ has the same meaning as defined by obligations should include, when highlighted problems associated with generally accepted accounting principles (see, e.g., material, disclosure of the effects of FASB, Statement of Financial Accounting Standards No. 107, ‘‘Disclosures about Fair Value derivatives. 20 The Commission currently is considering of Financial Instruments’’ (‘‘FAS 107’’) (December comments and suggestions on how to improve the 1991), paragraph 5). 18 See note 63, infra, for a definition specifying descriptions of risk provided to investors by mutual 16 See section III B3b, infra, for a discussion about how the term ‘‘primary market risk exposures’’ is funds and other investment companies. See where, outside the financial statements, these used in this release. ‘‘Improving Descriptions of Risk by Mutual Funds disclosures would appear. 19 For purposes of this release, ‘‘anticipated and Other Investment Companies,’’ Securities Act 17 The proposed amendments regarding transactions’’ means transactions (other than Release No. 7153, 60 FR 17172 (April 4, 1995). disclosure of qualitative and quantitative transactions involving existing assets or liabilities 21 The proposed amendments relating to information about market risk do not relate solely or transactions necessitated by existing firm accounting policies disclosures, however, would to derivatives, but also to investments in other commitments) an enterprise expects, but is not apply to both registered investment companies and financial instruments. These disclosures would be obligated, to carry out in the normal course of small business issuers. required for registrants that have material business (see, e.g., ¶ 9 of Statement of Financial 22 See, e.g., Item 303 of Regulation S–B, 17 CFR investments in other financial instruments, even Accounting Standards No. 80, ‘‘Accounting for 228.303, and Item 303 of Regulation S–K, 17 CFR though they have no investments in derivatives. Futures Contracts’’ (‘‘FAS 80’’) (August 1984)). 229.303. 580 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules disclosures about market risk sensitive New York recommended a new instruments. In particular, the SEC staff instruments, as identified by users of financial statement providing identified the following three primary financial reports. For example, the quantitative information about the disclosure issues. 30 Association for Investment Management overall market risk of an entity. In 1. Footnote disclosures of accounting and Research (‘‘AIMR’’), an organization addition, the FEI task force policies for derivatives often are too general of financial analysts, noted that users recommended that companies ‘‘disclose to convey adequately the diversity in ‘‘are confounded by the . . . complexity some type of information which accounting that exists for derivatives. Thus, of financial instruments.’’ 23 In addition, conveys overall exposure to market it often is difficult to determine the impact after considerable investigation into the risk.’’ 31 In this regard, the FEI task force of derivatives on registrants’ statements of needs of investors and creditors, the suggests two distinct approaches. One financial position, cash flows, and results of American Institute of Certified Public approach is to provide a high-level operations; summary of relevant statistics about 2. Disclosures often focus on derivatives Accountant’s (‘‘AICPA’’) Special and other financial instruments in isolation. Committee on Financial Reporting outstanding activity at period end. The Thus, it may be difficult to assess whether stated: 24 second approach is to communicate the these instruments increase or decrease the Users are confused. They complain that potential loss which could occur under net market risk exposure of a registrant; and business reporting is not answering specified conditions using either a value 3. Disclosure about financial instruments, important questions, such as: . . . What at risk or another comprehensive model commodity positions, firm commitments, [innovative financial] instruments has the to measure market risk.32 and other anticipated transactions (‘‘reported company entered into, and what are their In October 1994, the FASB, items’’) in the footnotes to the financial terms? How has the company accounted for responding in part to calls for improved statements, MD&A, schedules, and selected those instruments, and how has that disclosure, issued Statement of financial data may not reflect adequately the accounting affected the financial statements? effect of derivatives on such reported items. What risks has the company transferred or Financial Accounting Standards No. 119, ‘‘Disclosures about Derivative Thus, without disclosure about the effects of taken on? [page 76] derivatives, information about the reported Financial Instruments and Fair Value of Other organizations recently have items may be incomplete or perhaps Financial Instruments’’ (‘‘FAS 119’’) misleading. made recommendations on how to (October 1994).33 FAS 119 prescribes, improve such disclosures about market among other things, disclosures in the The proposals in this release are risk sensitive instruments. These financial statements about the policies designed to address these issues. They organizations include regulators, such used to account for derivative financial reflect a significant amount of learning 25 as the Group of 10 Central Bankers, instruments and a discussion of the by the Commission and its staff over the the Federal Reserve Bank of New nature, terms, and cash requirements of past year and a half about (i) derivatives York,26 the Basle Committee and the derivative financial instruments. FAS and related risk management activities, Technical Committee of IOSCO,27 and 119 also encourages, but does not and (ii) alternative disclosure private sector bodies, such as the Group require, disclosure of quantitative approaches to make those activities of Thirty 28 and a task force of the information about an entity’s overall more understandable to investors. In Financial Executives Institute (‘‘FEI’’).29 market risk.34 addition, during this period, the In general, these organizations have During 1994, in response, in part, to Commission and its staff developed the stressed the need to make more the concerns of investors, regulators, following guiding principles, which understandable the risks inherent in and private sector entities, the SEC staff provided the foundation for the market risk sensitive instruments. In reviewed the annual reports of proposed amendments described in this particular, they have called for approximately 500 registrants. In release: additional quantitative and qualitative addition, during 1995, more recent • Disclosures should allow investors disclosures about market risk. For annual reports were reviewed by the to understand better how derivatives example, the Federal Reserve Bank of SEC staff to assess the effect of FAS 119 affect a registrant’s statements of on disclosures about market risk financial position, cash flows, and 23 See AIMR, Financial Reporting in the 1990s sensitive instruments. As a result of results of operations; and Beyond, page 30 (1993). • Disclosures should provide 24 these reviews, the SEC staff observed See AICPA Special Committee on Financial that FAS 119 had a positive effect on the information about market risk; Reporting, Improving Business Reporting—A • Customer Focus: Meeting the Information Needs of quality of disclosures about derivative Disclosures should allow the Investors and Creditors (1994). financial instruments. However, the SEC investor to understand how market risk 25 See Bank for International Settlements, A staff also concluded there was a need to sensitive instruments are used in the Discussion Paper on Public Disclosure of Market improve disclosures about derivative context of the registrant’s business; and Credit Risks by Financial Intermediaries, • prepared by working group of the Euro-currency financial instruments, other financial Disclosures about market risk Standing Committee of the Central Banks of the instruments, and derivative commodity should not focus on derivatives in Group of Ten Countries (September 1994). isolation, but rather should reflect the 26 See Federal Reserve Bank of New York, Public 30 See note 26, supra. risk of loss inherent in all market risk Disclosure of Risks Related to Market Activity: A 31 See Attachment A, page 1 of FEI Report. sensitive instruments; Discussion Paper (November 1994). 32 See Attachment B, pages 5 and 6 of FEI Report. • 27 See Basle Committee and the Technical Disclosure requirements about 33 Similar standards were recently adopted or market risk should be flexible enough to Committee of IOSCO, Framework for Supervisory proposed by the International Accounting Information about the Derivatives Activities of Standards Committee, the Canadian Institute of accommodate different types of Banks and Securities Firms (May 1995). See also Chartered Accountants, and the Australian registrants, different degrees of market Basle Committee and the Technical Committee of Accounting Standards Board. See International risk exposure, and alternative ways of IOSCO, Public Disclosure of the Trading and Accounting Standards No. 32, ‘‘Financial Derivatives Activities of Banks and Securities Firms Instruments: Disclosure and Presentation’’ (‘‘IAS measuring market risk; (November 1995). 32’’) (March 1995), Section 3860 of the Handbook • Disclosures about market risk 28 See Group of Thirty, Derivatives: Practices and of the Canadian Institute of Chartered Accountants, should highlight, where appropriate, Principles (July 1993). and the Australian Accounting Standards Board’s special risks relating to leverage, option, 29 See FEI, Derivative Financial Instruments exposure draft entitled, ‘‘Presentation and or prepayment features; and Accounting and Disclosure Issues, (‘‘FEI Report’’) Disclosure of Financial Instruments’’ (June 1995), • prepared by FEI CCF/CCR Derivatives Disclosure respectively. New disclosure requirements Task Force (August 1994). 34 See FAS 119 ¶ 12. should build on existing disclosure Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 581 requirements, where possible, to staff observed that registrants may derivative financial instruments and minimize compliance costs of account for the same type of derivative derivative commodity instruments. registrants. in many different ways.38 Thus, it was difficult to compare the financial 2. Proposed Disclosure Rule III. Discussion of Proposed Amendments statement effects of derivatives across The proposed amendments pertaining registrants. to accounting policies would add a new A. Disclosure of Accounting Policies for In order to provide a better paragraph (n) to Rule 4–08 of Regulation Derivatives understanding of the accounting for S–X to require disclosure in the 1. Background derivative financial instruments, footnotes to the financial statements of paragraph 8 of FAS 119 requires During the last several years, a (i) each method used to account for disclosure of the policies used to derivatives, (ii) types of derivatives significant number of issues relating to account for such instruments, pursuant accounted for under each method, (iii) the accounting for derivatives have been to the requirements of APB 22.39 the criteria required to be met for each raised. Although the FASB is working Specifically, FAS 119 emphasizes the accounting method used (e.g., the on a project that would address disclosure of ‘‘policies for recognizing manner in which risk reduction, comprehensively the accounting for (or not recognizing) and measuring correlation, designation, and/or derivatives, currently there is very little derivative financial instruments . .. authoritative literature on the and when recognized, where those effectiveness tests are applied), (iv) the accounting for options and complex instruments and related gains and losses accounting method used if the specified derivatives, many of which are used are reported in the statements of criteria are not met, (v) the accounting 35 frequently by registrants. financial position and income.’’ 40 for the termination of derivatives In the absence of comprehensive However, notwithstanding its helpful designated as hedges or used to affect literature, registrants are developing guidance, FAS 119 does not provide an directly or indirectly the terms, fair accounting practices for options and explicit indication of what must be values, or cash flows of a designated complex derivatives by analogy to the disclosed in accounting policies item, (vi) the accounting for derivatives limited amount of literature that does footnotes to make more understandable if the designated item matures, or is exist. These analogies are complicated the effects of derivatives on the sold, extinguished, terminated, or, if because existing derivative literature statements of financial position, cash related to an anticipated transaction, is refers to at least three distinctly flows, and results of operations, and it no longer likely to occur, and (vii) different methods of accounting for does not address disclosure of where and when derivatives and their derivatives (e.g., fair value accounting, accounting policies for derivative related gains and losses are reported in deferral accounting, and accrual the statements of financial position, 36 commodity instruments. Thus, to accounting) and the underlying cash flows, and results of operations.41 concepts and criteria used in facilitate a more informed assessment of determining the applicability of these the effects of derivatives on financial The proposed amendments would accounting methods are not statements, the proposed amendments require registrants to distinguish consistent.37 As a result, during its 1994 make explicit the items to be disclosed between accounting policies used for and 1995 reviews of filings, the SEC in the accounting policies footnotes for derivatives entered into for trading purposes from those that are entered 38 35 The authoritative accounting literature for The Commission does not mean to imply by into for purposes other than trading.42 options and complex derivatives generally is this statement that registrants may justify the use of any method of accounting for derivatives. Rather Disclosure of accounting policies for limited to a few consensuses from the FASB derivatives would be required unless Emerging Issues Task Force (‘‘EITF’’), which by registrants must select appropriate accounting their nature address the accounting for very specific methods that are consistent with generally accepted the registrant’s derivative activities are transactions. See, e.g., EITF Issues 88–8, ‘‘Mortgage accounting principles. In particular, generally not material. For this proposal, the Swaps,’’ and 90–17, ‘‘Hedging Foreign Currency accepted accounting principles require registrants materiality of derivatives activities Risks with Purchased Options.’’ using derivatives for trading, dealing, or speculative purposes to recognize those instruments on the would be measured by the fair values of 36 Under the fair value method, derivatives are carried on the balance sheet at fair value with balance sheet at fair value with changes in that derivative financial instruments and changes in that value recognized in earnings or value recognized immediately in earnings (see, e.g., derivative commodity instruments at stockholders’ equity (see, e.g., Statement of FAS 80 ¶ 3). the end of each reporting period and the Financial Accounting Standards No. 52, ‘‘Foreign 39 APB 22 ¶ 12 states: Currency Translation’’ (‘‘FAS 52’’) (December Disclosure of accounting policies should identify fair value of those instruments during 1981), and FAS 80. Under the deferral method, and describe the accounting policies followed by each reporting period. gains and losses from derivatives are deferred on the reporting entity and the methods of applying In essence, the proposed amendments the balance sheet and recognized in earnings in those principles that materially affect the conjunction with earnings of designated items (see, determination of financial position, cash flows or clarify the application of the accounting e.g., FAS 52 and FAS 80). Under the accrual results of operations. In general, the disclosure policy disclosure requirements set forth method, each net payment/receipt due or owed should encompass important judgments as to the in FAS 119 for derivative financial under the derivative is recognized in earnings appropriateness of principles relating to recognition instruments. They also extend those during the period to which the payment/receipt of revenue and allocation of asset costs to current relates; there is no recognition on the balance sheet and future periods; in particular, it should requirements to address the disclosure for changes in the derivative’s fair value (see, e.g., encompass those accounting principles and of accounting policies for derivative EITF Issue 84–36, ‘‘Interest Rate Swap methods that involve . . . a selection from existing commodity instruments.43 Transactions’’). acceptable alternatives. 37 For example, the risk reduction criterion in The Accounting Principles Board was the FAS 52 is different from the risk reduction criterion predecessor to the FASB. Unless superseded by 41 FAS 119 ¶ 11(b) also requires a description of in FAS 80. FAS 52 specifies risk reduction on a FASB Statements, APB Opinions continue to be where gains and losses from derivative financial transaction basis, while FAS 80 specifies risk regarded as the highest level of generally accepted instruments held or issued for purposes other than reduction on an enterprise basis. In addition, FAS accounting principles followed by the accounting trading are reported in the statements of financial 80 permits the use of deferral accounting for futures profession. See generally AICPA, Statements on position and income. contracts used to hedge probable, but not firmly Auditing Standards No. 69, ‘‘The Meaning of 42 For purposes of this release, the term ‘‘trading committed, anticipated transactions, while FAS 52 Present Fairly in Conformity With Generally purposes’’ has the same meaning as defined by prohibits deferral accounting for foreign currency Accepted Accounting Principles in the Independent generally accepted accounting principles (see, e.g., forward exchange contracts used to hedge those Auditor’s Report,’’ ¶ 5 (March 1992); AU § 411.05. FAS 119 ¶ 9a). same types of anticipated transactions. 40 See FAS 119 ¶ 60. 43See note 14, supra. 582 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules

3. Requests for Comment investments, loans, structured notes, financial instruments, and derivative 1. The proposed amendments mortgage-backed securities, indexed commodity instruments, to the extent it requiring disclosure of accounting debt instruments, interest-only and is material. This information would be policies for derivatives are designed to principal-only obligations, deposits, and furnished using one of the following make it easier for investors to assess the other debt obligations; three ways, at the election of the • registrant.48 financial statement effects of derivative Derivative commodity instruments that are reasonably possible 44 to be financial instruments and derivative (i) Tabular Presentation settled in cash or with another financial commodity instruments. Would the The first quantitative market risk proposed disclosures accomplish this instrument—commodity futures, commodity forwards, commodity disclosure alternative would permit objective? If not, are there specific registrants to provide a tabular disclosures about accounting policies swaps, commodity options, and other commodity instruments with similar presentation of terms and information that should be added or deleted? related to derivative financial 2. The proposed amendments relating characteristics, to the extent such instruments are not derivative financial instruments, other financial to disclosures of accounting policies are instruments, and derivative commodity limited to derivative financial instruments. Generally accepted accounting instruments. Such information would instruments and derivative commodity principles and Commission rules include, but is not limited to, fair values instruments. These proposed disclosure require disclosure of certain quantitative of instruments, expected principal or requirements do not add to the information pertaining to some of these transaction cash flows, weighted accounting policies disclosure derivative financial instruments. For average effective rates or prices, and requirements for other financial example, registrants currently are other relevant market risk related instruments, which are addressed by required to disclose notional amounts of information. These data are common generally accepted accounting derivative financial instruments and the inputs to market risk measurement principles (e.g., APB 22). Is the scope of nature and terms of debt obligations.45 methods and, therefore, may be useful instruments covered by the proposed However, this information (i) often is in understanding a registrant’s exposure amendments requiring additional abbreviated, (ii) is presented piecemeal to market risk. accounting policies disclosures in different parts of the financial This tabular information would be appropriate? If not, which instruments statements, and (iii) does not apply to summarized by risk exposure category should be included or excluded? all market risk sensitive instruments. (i.e., interest rate risk, foreign currency 3. Under the proposed amendments, Thus, investors often are unable to exchange rate risk, commodity price disclosure of accounting policies would risk, and other similar price risks, such assess whether or how particular be required unless the registrant’s as equity price risk) and, within the financial and commodity instruments derivative activities are not material. For foreign currency exchange rate risk affect a registrant’s net market risk this proposal, the materiality of category, by functional currency 49 (e.g., exposure. derivatives activities would be U.S. dollar, Japanese yen). Within each FAS 119 encourages, but does not measured by the fair values of derivative of these risk exposure categories, require, disclosure of quantitative financial instruments and derivative instruments would be grouped based on information about the overall market commodity instruments at the end of common characteristics. At a minimum, risk inherent in derivative financial each reporting period and the fair value instruments would be distinguished by instruments and other instruments of those instruments during each the following characteristics: (i) Fixed subject to market risk.46 However, the reporting period. Is this disclosure rate or variable rate assets or liabilities, SEC staff has observed that registrants threshold appropriate? If not, what other (ii) long or short forwards or futures, often do not make these disclosures. threshold could be specified to require (iii) written or purchased put or call disclosure of all information a b. Proposed Disclosure Rule options, (iv) receive fixed or receive reasonable investor would consider To allow investors to assess more variable interest rate swaps, and (v) the important to decision-making (e.g., easily overall market risk, the proposed currency in which the instruments’ cash flows are denominated. Thus, for would it be more appropriate to use a amendments would create a new Item example, within the interest rate risk disclosure threshold similar to the 305(a), which would require disclosure, exposure category, a registrant might threshold for quantitative and outside the financial statements,47 of present the following list of qualitative disclosures about market risk quantitative market risk information for instruments: fixed rate Mexican peso proposed in section III B3a of this derivative financial instruments, other release)? investments, variable rate U.S. dollar 44 See note 65, infra, for a definition specifying B. Disclosures of Quantitative and 48 how the term ‘‘reasonably possible’’ is used in this At the current time, the Commission is not Qualitative Information About Market release. proposing to prescribe standardized methods and Risk 45 procedures specifying how to comply with each of See, e.g., FAS 119 ¶ 8b and Rule 5–02 of these disclosure alternatives. To the extent 1. Quantitative Information About Regulation S–X, 17 CFR 210.5–02. registrants use one of these methods internally, they 46 In particular, FAS 119 ¶ 12 lists five possible Market Risk would be permitted, but not required, to report quantitative methods of measuring and disclosing quantitative measures of market risk using the same a. Background market risk. They are: (i) details about current method externally. To facilitate comparison across positions and perhaps activity during the period, registrants, the Commission proposes, below, that Market risk is inherent in both (ii) the hypothetical effects on equity, or on annual registrants provide descriptions of the model and derivative and non-derivative income, of several possible changes in market price, assumptions used to prepare quantitative market (iii) a gap analysis of interest rate repricing or instruments, including: risk disclosures. • maturity dates, (iv) the duration of the financial 49 For purposes of this release, functional Derivative financial instruments— instruments, and (v) the entity’s value at risk from currency means the currency of the primary futures, forwards, swaps, options, and derivative financial instruments and from other economic environment in which the entity other financial instruments with similar positions at the end of the reporting period and the operates; normally, that is the currency of the average value at risk during the year. environment in which an entity primarily generates characteristics; 47 • See section III B3b, infra, for a discussion about and expends cash. This definition is the same as the Other financial instruments—non- where, outside the financial statements, these definition of functional currency in FAS 52, derivative financial instruments, such as disclosures would appear. Appendix E. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 583 debt obligations, long U.S. Treasury the registrant’s sensitivity analysis percentage of actual changes in fair futures, and Mexican peso receive model that are necessary to an values, earnings, or cash flows from variable interest rate swaps. Derivatives understanding of the registrant’s market market risk sensitive instruments that used to manage risks inherent in risk disclosure. In this regard, exceeded the reported value at risk anticipated transactions also would be registrants would specify, at a amounts during the current reporting disclosed separately. minimum, (i) how loss is defined by the period. For each instrument in the table, model (e.g., loss in earnings, fair values, The proposed amendments also expected principal or transaction cash or cash flows), (ii) a general description would require disclosure of the model flow information would be presented of the modeling technique (e.g., change assumptions and parameters underlying separately for each of the next five in net present values arising from the registrant’s value at risk model that years, with the remaining expected cash parallel shifts in market rates or prices are necessary to an understanding of the flows presented as an aggregate amount. and how optionality is addressed by the registrant’s market risk disclosure. In The proposed amendments also would model), (iii) the general types of this regard, registrants would specify, at require disclosure of information on instruments covered by the model (e.g., a minimum, (i) how loss is defined by assumptions necessary to an derivative financial instruments, other the model (e.g., loss in fair values, understanding of a registrant’s tabular financial instruments, derivative earnings, or cash flows), (ii) a general market risk disclosures. In this regard, commodity instruments, and whether description of the modeling technique registrants would describe, at a other instruments are included (e.g., variance/covariance, historical minimum, the differing numbers voluntarily in the model by the simulation, Monte Carlo simulation, and reported in the table for various registrant, such as certain commodity how optionality is addressed by the categories of instruments (e.g., principal instruments and positions, cash flows model), (iii) the general types of cash flows for debt, notional amounts from anticipated transactions, and instruments covered by the model (e.g., for swaps, contract amounts for options operating cash flows from non-financial derivative financial instruments, other and futures) and key prepayment and/ and non-commodity instruments), and financial instruments, derivative or reinvestment assumptions relating to (iv) other relevant information on model commodity instruments, and whether the timing of reported cash flow parameters (e.g., the magnitudes of other instruments are included amounts. See the Appendix to the text parallel shifts in market rates or prices voluntarily in the model by the of the proposed amendments for a used for each category of market risk registrant, such as certain commodity sample disclosure. exposure, the method by which instruments and positions, cash flows (ii) Sensitivity Analysis discount rates are determined, and key from anticipated transactions, and prepayment and/or reinvestment operating cash flows from non-financial The second quantitative market risk assumptions). disclosure alternative would permit and non-commodity instruments), and registrants to provide disclosure of (iii) Value at Risk (iv) other material information on model parameters (e.g., holding period, sensitivity analyses expressing the The third quantitative disclosure confidence interval, and the method hypothetical loss in future earnings, fair alternative would permit registrants to used for aggregating value at risk values, or cash flows of market risk provide value at risk disclosures amounts across market risk exposure sensitive instruments over the next expressing the potential entity-wide loss categories, such as by assuming perfect reporting period due to hypothetical in fair values, earnings, or cash flows of changes in interest rates, currency positive correlation, independence, or market risk sensitive instruments that 53 exchange rates, commodity prices, and might arise from adverse market by using actual observed correlations). other similar market price changes (e.g., movements with a selected likelihood of (iv) Other Disclosure Requirements equity prices).50 For example, these occurrence over a selected time The proposed amendments would disclosures may be similar to the interval.52 Additional separate value at require presentation of quantitative interest rate ‘‘sensitivity’’ measures risk disclosures would be required for information about market risk at the end already required to be calculated for interest rate sensitive instruments, of the most recent fiscal year or at the regulatory purposes for thrift currency exchange rate sensitive end of the most recent reporting period institutions.51 Under the proposed instruments, certain commodity price amendments, earnings, fair values, or sensitive instruments, and other similar for which a full set of financial cash flows sensitivity disclosures would market risk sensitive instruments (e.g., statements is filed with the be presented separately for interest rate equities). In addition, to help place Commission. Under the proposed sensitive instruments, currency reported value at risk amounts in amendments, registrants would be exchange rate sensitive instruments, context, registrants would be required to required to provide separately certain commodity price sensitive report either (i) the average or range in quantitative information for market risk instruments, and other types of market value at risk amounts for the current sensitive instruments that are entered 54 risk sensitive instruments (e.g., equity reporting period, (ii) the average or into for trading purposes and those instruments). range in actual changes in fair values, The proposed amendments also earnings, or cash flows from market risk 53 The primary differences between the value at risk and sensitivity analysis disclosure alternatives would require disclosure of the sensitive instruments occurring during are (i) value at risk analysis reports the potential assumptions and parameters underlying the current reporting period, or (iii) the loss arising from equally likely market movements across instruments, while sensitivity analysis 50 The term ‘‘sensitivity analysis,’’ as used in this 52 The term ‘‘value at risk,’’ as used in this release, reports the potential loss arising from hypothetical release, describes a general class of models that describes a general class of models that provide a market movements with differing likelihoods of assesses the risk of loss in market risk sensitive probabilistic assessment of the risk of loss in market occurrence across instruments and (ii) value at risk instruments based on hypothetical changes in risk sensitive instruments. The term value at risk is explicitly adjusts the potential loss to reflect market rates or prices. The term sensitivity analysis not meant to refer to any one model for quantifying correlations between market movements, while is not meant to refer to any one model for market risk. Value at risk models can be adapted to sensitivity analysis is not designed explicitly to quantifying market risk. non-trading activities as well as trading activities make such adjustments. 51 See Office of Thrift Supervision, Regulatory and to non-financial institutions as well as financial 54 See note 42, supra, for a definition specifying Capital: Interest Rate Risk Component, 12 CFR institutions, depending on the model and how the term ‘‘trading purposes’’ is used in this 567.5(c)(4) (August 1993). assumptions selected by the registrant. release. 584 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules that are entered into for purposes other lumber, silver, gold, and other permitted, is a limitation of the than trading. In addition, in order to commodity inventory positions; quantitative information provided. This enable an investor to assess material • Cash flows from anticipated limitation must be described if the changes in market risk information, the transactions 57—such as cash flows from registrant has material investments in proposed amendments would require anticipated purchases and sales of these instruments, positions, and registrants to provide summarized inventory; and transactions that cause its disclosures information as of the end of the • Operating cash flows from non- not to portray fully the overall market preceding fiscal year or comparable financial and non-commodity risk of the entity. preceding period. Registrants also instruments— such as cash flows Second, each of the quantitative would be required to discuss the generated by manufacturing activities. disclosure alternatives may not alert reasons for material changes in The Commission also recognizes, investors of the degree of market risk quantitative information about market however, that the amount and timing of inherent in instruments with leverage, risk when compared to the information the cash flows inherent in such option, or prepayment features (e.g., reported in the previous period.55 instruments, positions, and transactions structured notes, collateralized mortgage Registrants would be allowed to change often are difficult to estimate. In obligations, leveraged swaps, and swaps methods of disclosing quantitative addition, most risk measurement with embedded written options). information about market risk (e.g., systems currently do not include such Tabular information on expected future changing from tabular presentation to instruments, positions, and transactions cash flows normally would not indicate value at risk). However, if they change in their quantitative assessments of that instruments have such features. methods, registrants would be required market risk. For these practical reasons, Value at risk and sensitivity analysis to (i) disclose the reasons for any such the Commission is not proposing at this models generally do not reflect the change and (ii) provide summarized time to require that these items be potential loss arising from all changes in comparable information, under the new included in the proposed quantitative market rates or prices. Thus, if leverage, disclosure method, as of the end of the disclosures about market risk. However, option, or prepayment features are period preceding the current reporting registrants are encouraged, when triggered by changes in market rates or period. practical, to include voluntarily these prices outside those reflected in the items in their quantitative market risk value at risk and sensitivity analysis (v) Encouraged Disclosures disclosures. If these instruments, disclosures, the potential loss in these In essence, the proposed amendments positions, and transactions are not instruments may be significantly larger primarily are designed to make included voluntarily, registrants, than would be implied by a simple disclosures about market risk more nonetheless, should consider whether linear extrapolation of the reported comprehensive by requiring disclosure they must address this issue in their numbers. Thus, to make investors fully of quantitative information about market disclosures identifying limitations of the aware of the market risk inherent in risk that are encouraged to be disclosed quantitative information, discussed instruments with such features, the 58 by FAS 119. The proposals apply to below. proposed amendments would require a (i) discussion of this limitation of the derivative financial instruments, other (vi) Limitations financial instruments, and derivative quantitative disclosures and (ii) The proposed amendments would commodity instruments.56 description of the leverage, option, or require that registrants discuss prepayment features of the instruments The Commission recognizes that limitations that may cause the causing the limitation. market risk exposures may exist in quantitative information about market instruments, positions, and transactions risk not to reflect fully the overall c. Requests for Comment other than in those derivative financial market risk of the entity. This 1. The proposed amendments are instruments, other financial discussion would include (i) a designed specifically to elicit disclosure instruments, and derivative commodity description of each limitation and (ii) if of quantitative information to assist instruments that specifically would be applicable, a description of the investors and others in making an subject to the proposed amendments. In instruments’ features that are not overall assessment of market risk. The particular, market risk, in its broadest reflected fully within the selected Commission recognizes that some view, also may be inherent in the quantitative market risk disclosure investors may be unfamiliar with certain following items: alternative. of the proposed quantitative disclosure • Derivative commodity instruments Two illustrative examples are methods. Thus, the Commission not reasonably possible to be settled in provided. First, as just stated, the requests comment (a) on whether the cash or with another financial Commission is allowing certain proposed quantitative information is instrument—such as a commodity instruments, positions, and transactions expected to improve investors’ forward contract that must be settled in to be excluded from quantitative understanding of the market risk the commodity; disclosures about market risk. The associated with business activities of a • Commodity positions—such as failure of a registrant to include such registrant and (b) on the extent to which investments in corn, wheat, oil, gas, items in its disclosures, while investors will benefit from and understand the proposed quantitative 55 For transition purposes, the Commission is 57 See note 19, supra. market risk alternatives. proposing that quantitative disclosures about 58 In addition, registrants should review the 2. The proposed amendments relating market risk provided in the initial period after the requirements of Item 303 of Regulation S-K, 17 CFR to disclosure of quantitative information rule is adopted would not contain comparable 229.303, to ensure that disclosures are sufficient to summarized information for the preceding period. inform readers of material risks to which a about market risk are limited to Similarly, in the initial year after the rule is registrant is exposed. Thus, MD&A would need to derivative financial instruments, other adopted, a discussion of the reasons for material discuss the risks relating to, for example, financial instruments, and derivative changes in reported amounts as compared to the anticipated transactions or commodity positions, to commodity instruments. In addition, preceding period would not be necessary. the extent these transactions or positions have, or 56 These disclosures would be required for other are reasonably likely to have, a material effect on when preparing these disclosures, financial instruments, even if a registrant does not the registrant’s liquidity, capital resources, and registrants are encouraged to present enter into derivatives. results of operations. information about all instruments, Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 585 positions, and cash flows subject to quantitative information about market flow amounts, and fair values of market market risk. Is the scope of instruments risk is not likely to be prepared in a risk sensitive instruments, the covered by these proposed amendments uniform manner across registrants. Commission has specified that sufficient? For example, should However, to facilitate the analysis and information be disaggregated by risk commodity positions with readily comparison of quantitative market risk exposure category and grouped further available market prices be required to be information among registrants, the based on certain common instrument included in the quantitative Commission is proposing disclosure of characteristics. Sample disclosures have disclosures? In addition, are there other the model and assumptions used to been provided in the Appendix to the instruments and positions that should comply with the quantitative market text of the proposed amendments to be included or excluded? risk amendments. Will the proposed illustrate compliance with these 3. The Commission is proposing to disclosures about the model and key requirements. Is the level of allow registrants to choose one of three assumptions provide sufficient disaggregation specified in the alternatives to present quantitative information for investors to compare requirements adequate? Is there a better information about market risk (i.e., market risk across registrants? Are there way to present such information? tabular presentation of expected future additional disclosures that might further 8. The proposed amendments cash flows and terms, sensitivity investors’ analysis and comparison? Is requiring disclosure of quantitative analysis, or value at risk). Are these the there a better approach to enhancing the information about market risk generally most appropriate alternatives? If not, comparability of the proposed are designed to indicate the degree of should some alternatives be added or disclosures? For example, despite the market risk from normal market deleted? For example, although the evolving risk management practices, movements. The proposed disclosure Commission has not proposed use of should standardized procedures be alternatives do not specifically require interest gap analysis and duration developed for preparing disclosures estimates of the market risk inherent in because these market risk measurement across registrants? Alternatively, should unusual markets reflecting worst-case methods commonly are not used to minimum acceptable standards be set scenarios. Should the proposed describe the market risk inherent in prescribing model parameters and amendments address specifically market non-interest rate sensitive instruments assumptions? risk in worst-case scenarios? If so, what and non-fixed income instruments, 6. The Commission recognizes that would be a useful standard for respectively, should these methods also quantitative disclosures about market determining and disclosing a worst-case be allowed? risk may be viewed as more meaningful scenario? 4. In this release, the Commission for certain registrants than others. For 9. To help place the reported value at proposes amendments designed to allow example, because market risk is one of risk numbers in context, the proposed investors to evaluate quantitatively the the primary business risks for financial amendments require that registrants overall market risk inherent in institutions, quantitative information report either (i) the average or range in derivative financial instruments, other about market risk may be more value at risk amounts for the current financial instruments, and derivative meaningful when applied to financial reporting period, (ii) the average or commodity instruments. Although the institutions than the same information range in actual changes in fair values, proposals permit registrants to select presented for registrants whose primary earnings, or cash flows from market risk one of three alternative quantitative risks are not related to market risk. sensitive instruments during the current disclosure methods, they require that In this regard, the Commission has reporting period, or (iii) the percentage the same general disclosure alternative proposed that registrants have the of actual changes in fair values, (i.e., tabular presentation of expected ability to choose among three disclosure earnings, or cash flows from market risk future cash flows and terms, sensitivity alternatives. These alternatives reflect sensitive instruments that exceeded the analysis, or value at risk) be used to different degrees of sophistication in reported value at risk amounts during describe quantitatively the market risk risk measurement methods, thereby the current reporting period. Will this inherent (i) in each market risk exposure permitting registrants flexibility to information be useful to investors and category (e.g., interest rates, foreign select a disclosure method which others? Since similar disclosures cannot currency exchange rates, and corresponds most closely to the degree be developed easily for the other commodity prices) and (ii) in of market risk inherent in their business disclosure alternatives for presenting instruments entered into for trading and activities. Are there better ways to quantitative information about market other than trading purposes. Is this address how information about market risk (i.e. tabular presentation of approach practical? Should the risk should be presented for the expected cash flows and terms and Commission permit registrants to use different types of registrants that file sensitivity analysis), should these different alternatives to report the with the Commission? In particular, disclosures be encouraged, rather than market risk inherent (i) in different should financial institutions, such as required? categories of market risk exposure and/ bank holding companies, thrift holding 10. To enable investors to assess or (ii) in instruments entered into for companies, finance companies, material changes in market risk, the trading and other than trading investment banks, mortgage banks, proposed amendments would require purposes? If so, how will this affect the broker-dealers, insurance companies, registrants to provide summarized ability of investors to assess the overall and similar types of registrants have a quantitative information about market market risk inherent in market risk different set of disclosure requirements risk for the preceding fiscal year. In sensitive instruments? Please explain. than other companies? If so, should addition, registrants would be required 5. The Commission recognizes that financial institutions have more to discuss the reasons for material risk management methods are evolving, rigorous disclosure requirements than changes in quantitative information and no method is dominant in practice. those proposed in this release or should about market risk when compared to the The proposed amendments, therefore, non-financial institutions be exempted information reported in the previous do not require the use of a single from certain of the proposed disclosures period. Is this information necessary to measure or standardized procedures or specified in this release? an understanding of the current period assumptions for preparing quantitative 7. In regard to the presentation of market risk disclosures? If not, are there market risk disclosures. As a result, tabular information on the terms, cash other types of information that would be 586 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules helpful to investors in assessing disclosures help place market risk strategies, and instruments, if any, used material changes in market risk? management activities in the context of to manage those exposures). 11. Under the proposed amendments, the business and, therefore, are a useful In preparing the proposed qualitative registrants would be allowed to change complement to quantitative information disclosures about market risk, the methods of presenting quantitative about market risk. Commission expects that registrants information about market risk provided FAS 119 requires that certain would describe their primary market they (i) explain the reasons for the qualitative disclosures be provided risk exposures as they exist at the end change and (ii) provide summarized about market risk management activities of the current reporting period and how comparable information under the new those risks currently are being managed. associated with derivative financial disclosure method for the period Registrants also would be required to instruments held or issued for purposes preceding the current reporting period. describe material changes in their other than trading. In particular, FAS Should registrants be required to primary market risk exposures and 119 requires disclosure of ‘‘the entity’s present comparable information for the material changes in how these risks are objectives for holding or issuing the period preceding the current reporting managed as compared to what was in period when they change methods of derivative financial instruments, the effect during the most recent reporting presenting quantitative information context needed to understand those period and what is known or expected about market risk? objectives, and its general strategies for to be in effect in future reporting 60 12. The proposed amendments are achieving those objectives.’’ In periods. focused on providing investors with addition, FAS 119 requires separate These proposed qualitative disclosure improved disclosures about market risk disclosures about derivative financial requirements would apply to derivative sensitive instruments and the impact of instruments used as hedges of financial instruments, other financial 61 market risk on a registrant’s financial anticipated transactions. As indicated instruments, and derivative commodity condition and results of operations. above, these requirements of FAS 119 instruments. As in the case with respect Other regulators and private sector only apply to certain derivatives held or to the quantitative disclosures about entities have set forth proposals and issued for purposes other than trading. market risk, the qualitative disclosures made recommendations that would b. Proposed Disclosure Rule should be presented separately for require disclosures about derivatives market risk sensitive instruments that and similar instruments that go beyond In essence, the proposed qualitative are entered into for trading purposes the disclosures proposed under these disclosure requirements would create a and those that are entered into for proposed amendments.59 Such new Item 305(b) of Regulation S–K, purposes other than trading. In addition, recommendations relate to the which would expand certain FAS 119 qualitative information about market disclosure of credit risk, liquidity risk, disclosures to (i) encompass derivative risk should be presented separately for legal risk, and operational risk inherent commodity instruments, other financial those instruments used to manage risks in market risk sensitive instruments. instruments, and derivative financial inherent in anticipated transactions. The Commission notes that existing instruments entered into for trading Finally, to help make disclosures generally accepted accounting purposes and (ii) require registrants to about market risk more comprehensive, principles (e.g., FAS 105) and evaluate and describe material changes as is the case with the quantitative Commission Regulations (e.g., Items 101 in their primary risk exposures and disclosures about market risk, the and 303 of Regulation S–K, 17 CFR material changes in how those Commission also is proposing to 229.101 and 229.303, respectively) exposures are managed. In particular, encourage registrants to disclose already require some disclosures the proposed amendments would qualitative information about market relating to these risks. Thus, at this time require narrative disclosure outside the risk relating to other items, such as the Commission does not intend to financial statements 62 of (i) a derivative commodity instruments not propose additional disclosure registrant’s primary market risk reasonably possible to be settled in cash requirements about these other risks exposures 63 and (ii) how those or with another financial instrument, inherent in market risk sensitive exposures are managed (e.g., a commodity positions, cash flows from instruments. Is this decision description of the objectives, general anticipated transactions, and operating appropriate? cash flows from non-financial and non- 13. Would any of the proposed 60 See FAS 119 ¶ 11a. Footnote 4 of FAS 119 commodity instruments (e.g., cash flows 64 amendments regarding quantitative illustrates the qualitative disclosures required by generated by manufacturing activities). disclosures about market risk require ¶ 11a. That footnote states: c. Requests for Comment disclosure of information considered If an entity’s objective for a derivative position is highly proprietary by registrants? Are to keep a risk from the entity’s non-derivative assets 1. The proposed amendments below a specified level, the context would be a there other methods of quantifying and description of those assets and their risks, and a regarding qualitative disclosure about disclosing market risk that would be strategy might be purchasing put options in a market risk are designed to put market useful to investors and present fewer specified proportion to the assets at risk. risk management activities into the proprietary concerns? 61 See FAS 119 ¶ 11c. context of a registrant’s overall business. 62 See section III B3b, infra. Does this qualitative information allow 2. Qualitative Information About Market 63 For purposes of this release, primary market investors to understand better the Risk risk exposures mean (i) the following categories of market risk: interest rate risk, foreign currency management of market risk inherent in a. Background exchange rate risk, commodity price risk, and other the business activities of a registrant? If similar market rate or price risks (e.g., equity prices) A qualitative discussion of a not, are there other disclosure and (ii) within each of these categories, the alternatives that would be more registrant’s market risk exposures and particular markets that present the primary risks of how those exposures are managed is loss to the registrant. For example, if a registrant (i) effective? important to an understanding of a has a material exposure to foreign currency exchange rate risk and (ii) is most vulnerable to 64 See section III B1b(v), supra, for a discussion registrant’s market risk. Such qualitative changes in dollar/yen, dollar/pound, and dollar/ as to why these instruments are encouraged, but not peso exchange rates within this category of market required, to be included in disclosures about market 59 See notes 25 and 27, supra. risk, it would disclose these exposures. risk. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 587

2. Would any of the proposed For example, the fair value of assets there other disclosure thresholds that amendments regarding qualitative generally should not be netted with the would provide more meaningful disclosures about market risk require fair value of liabilities. Instead, the fair information to investors? For example, the disclosure of information considered values of such instruments should be for purposes of determining the highly proprietary in nature? Are there aggregated, without netting, for materiality of fair values of market risk other disclosures that would be useful purposes of assessing materiality.67 sensitive instruments at period end, to investors and present fewer In determining the materiality of the would it be better to determine a proprietary concerns? potential loss in future earnings or fair disclosure threshold based on the 3. The proposed amendments relating values from reasonably possible market materiality of the larger of the fair to disclosure of qualitative information movements, registrants should consider values of (i) assets, and ‘‘off-balance- about market risk are limited to (i) the magnitude of past market sheet’’ unrecognized assets or (ii) derivative financial instruments, other movements, (ii) expectations about the liabilities and ‘‘off-balance-sheet’’ financial instruments, and derivative magnitude of reasonably possible future unrecognized liabilities? Alternatively, commodity instruments. In addition, market movements, and (iii) potential would the disclosure thresholds for when preparing these disclosures, losses that may arise from leverage, MD&A be more appropriate? 68 registrants are encouraged, but not option, and/or multiplier features. Finally, should the Commission take required, to present information about a different approach to materiality (ii) Requests for Comment all instruments, positions, and cash assessments by specifying quantitative flows subject to market risk. Is the scope In developing the proposed disclosure indicators that provide a threshold for of instruments covered by this proposed thresholds, the Commission was disclosure, such as ratios of certain amendment sufficient? If not, which interested in establishing thresholds notional amounts, contractual amounts, instruments should be included or that considered the materiality of fair fair values, and/or potential future excluded? values of market risk sensitive losses to either stockholders’ equity, instruments at the end of a reporting earnings from continuing operations, 3. Implementation Issues Relating to period and the potential for market risk and/or some other amount? If so, what Quantitative and Qualitative Disclosures in those instruments in future periods. specific indicators should result in About Market Risk The Commission believes an assessment disclosure (e.g., fair value amounts in a. Disclosure Threshold of the materiality of the instruments excess of 10% of stockholders’ equity, (i) Discussion held at period end is appropriate or some other percentage of because investors are likely to be stockholders’ equity or some other Under the proposed amendments, concerned about the market risk amount; notional and contractual registrants would be required to make exposure of an entity whenever their amounts in excess of a specified quantitative and qualitative disclosures financial statements indicate material percentage of stockholders’ equity; and/ about market risk when such risk is investments in derivative financial or potential loss in earnings or fair material. For purposes of making this instruments, other financial values in excess of a specified materiality assessment, registrants instruments, and derivative commodity percentage of earnings from continuing would need to consider both (i) the instruments. Without such disclosure, operations)? If specific indicators are materiality of the fair values of investors likely would be unable to used, should netting of certain amounts derivative financial instruments, other determine the magnitude of the be permitted? financial instruments, and derivative combined market risk exposure inherent b. Location of Quantitative and commodity instruments outstanding at in these individual instruments. Qualitative Disclosures the end of the current reporting period Similarly, the Commission believes an and (ii) the materiality of the potential assessment of the risk of loss in (i) Discussion loss in future cash flows, earnings, or earnings, cash flows, or fair values from The proposed qualitative and fair values from reasonably possible reasonably possible future market market movements.65 If either (i) or (ii) quantitative market risk disclosure movements is necessary to capture, for amendments specify that these in the previous sentence are material, example, the potential exposure to registrants would have to disclose disclosures be placed outside the market risk in instruments with financial statements. Thus, for example, qualitative and quantitative information leverage, written option, or prepayment about market risk. this information would be required to be features that may not be reflected fully included in the annual report to In determining the fair values of in fair values at period end. market risk sensitive instruments shareholders, but would be located Are these proposed disclosure outside the financial statements covered outstanding at the end of the current thresholds relating to quantitative and reporting period, registrants generally by the audit opinion. The proposed qualitative disclosures about market disclosures are designed to supplement should not net fair values, except to the risk, including the guidance relating to extent allowed under FASB and make complete existing information netting of fair values of market risk about market risk sensitive instruments Interpretation No. 39, ‘‘Offsetting of sensitive instruments, appropriate? Are Amounts Related to Certain Contracts’’ (e.g., information required to be (‘‘Interpretation 39’’) (March 1992).66 disclosed by FAS 119) that currently except where a right of set off exists. Interpretation appears in prospectuses, registration 39 defines right of set off and specifies what 65 For purposes of this release, the term conditions must be met to have that right. FAS 119 statements, reports, and other ‘‘reasonably possible’’ is defined by ¶ 3 of FASB, ¶ 15(d) in disclosing the fair values of instruments documents that are used to make Statement of Financial Accounting Standards No. also prohibits the netting of fair values, except to investment and voting decisions and 5, ‘‘Accounting for Contingencies’’ (‘‘FAS 5’’) the extent that the offsetting of carrying amounts in that are delivered to investors and (March 1975), which states that ‘‘reasonably the statement of financial position is permitted possible’’ means the chance of a future transaction under Interpretation 39. shareholders. Thus, the Commission is or event occurring is more than remote but less than 67 In general, the Commission is not proposing the likely. netting of fair values for purposes of assessing 68 See SEC Financial Reporting Policies § 501.02 66 Interpretation 39 states that it is a general materiality primarily because it believes the for the interpretative release to Item 303 of principle of accounting that the offsetting of assets establishment of a set of netting rules for fair values Regulation S-K, which specifies the MD&A and liabilities in the balance sheet is improper would be complex and difficult to implement. disclosure thresholds. 588 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules recommending that the proposed market companies, and companies registering nature of these disclosures, as well as risk disclosures be included in such insurance contracts, such as market- the relative costs of complying with documents delivered to investors and value adjusted annuities and real estate these disclosures for small business shareholders, rather than included in funds underlying annuity contracts. issuers,71 that it is appropriate, at this documents filed only with the time, to exempt small business issuers (ii) Request for Comment Commission. from the proposed disclosures of Should proposed Item 305 of (ii) Request for Comment quantitative and qualitative information Regulation S–K be required for all about market risk. Accordingly, at this The Commission recognizes that the registrants that prepare MD&A pursuant time, the Commission is not proposing proposed disclosures may be complex, to Item 303 of Regulation to amend Regulation S–B to incorporate especially given the requirement to S–K? If not, which registrants should be an item similar to proposed Item 305 of describe, when appropriate, the model exempted from proposed Item 305 of Regulation S–K. Small business issuers, and key assumptions used to prepare Regulation S-K? In particular, should however, still would be required (i) to the quantitative disclosures about business development companies and comply with the proposed amendment market risk. Given this complexity, companies registering insurance regarding accounting policies would it be better to disclose the contracts be exempted from proposed disclosures for derivatives, (ii) to proposed information about market risk Item 305? comply with Rule 12b–20 and Rule 408 in reports and statements filed with the e. Safe Harbor Provision as described in section VI of this release, Commission that are not required to be thereby being responsive to guidance As noted by the FASB, some have delivered to all shareholders and reminding registrants to provide expressed concern that disclosing investors? If so, will investors be additional information about the effects disadvantaged by the omission of such information about market risk may have legal ramifications for registrants if of derivatives on information expressly information from delivered documents required to be filed with the if it is otherwise required to be included actual outcomes differ from the market risk amounts disclosed.69 It is the Commission, and (iii) to the extent in Commission filings and made market risk represents a known trend, available for free electronically and Commission’s intention that forward looking disclosures made pursuant to event, or uncertainty, to discuss the immediately through the SEC’s EDGAR impact of market risk on past and future system? proposed Item 305 of Regulation S–K and Item 9A of Form 20–F be subject to financial condition and results of c. Relationship of Proposed Disclosures an appropriate safe harbor. operations, pursuant to Item 303 of to MD&A Congress recently adopted the Private Regulation S–B, 17 CFR 228.303. Market risk sensitive instruments Securities Litigation Reform Act of 2. Request for Comment often are used to manage known 1995 70 that, among other things, uncertainties in market rates and prices. amends the Securities Act and Should small business issuers be Under Item 303 of Regulation S–K, Securities Exchange Act to include a excluded from either a portion or all of registrants currently are required to safe harbor for forward looking the proposed quantitative and disclose in MD&A, among other things, information. The Commission’s staff is qualitative disclosures about market the impact on past and future financial continuing to consider how best to craft risk? If not, should application of these condition and results of operations of an appropriate safe harbor in light of proposed amendments to small business known uncertainties. Thus, there is a this recent legislation. The Commission issuers be delayed to provide them more potential for overlap between the intends to issue a release shortly that time to become familiar with and proposed amendments under new Item would propose that the disclosures to be implement the amendments? 305 and current Item 303. To the extent required by new Items 305 and 9A be B. Application to Foreign Private Issuers that the disclosures in a registrant’s made subject to safe harbor provisions. MD&A comply with the proposed Comments received on that release will 1. Discussion amendments, registrants would not be considered in connection with the need to repeat this information comments received on this release to The need for improved disclosures elsewhere in their filings. Likewise, if enable the Commission to take about market risk sensitive instruments the proposed disclosures are provided appropriate action with respect to both is not an issue limited to domestic in the footnotes to the financial releases at the same time. registrants. Standard setters throughout the world have recognized and have statements, that information also would IV. Applicability of Proposed not need to be reported elsewhere. begun to address the need for Amendments improvement in such disclosures for d. Application to Registrants A. Application to Small Business Issuers foreign companies, including some (i) Discussion foreign private issuers that have 1. Discussion New Item 305 would require that all registered securities with the The Commission believes that 72 registrants currently required to provide Commission. The Commission is because of the newness and evolving MD&A disclosures, pursuant to Item 303 proposing to amend Form 20–F to of Regulation S–X, also would have to require disclosure by all foreign private 69 See FAS 119 ¶ 73. Under the Commission’s comply with proposed Item 305 of current safe harbor rules, a statement made by or Regulation S–K. As a result, to the on behalf of an issuer is not deemed a fraudulent 71 ‘‘Small business issuer’’ is defined to mean any extent material, quantitative and statement unless it can be shown that the statement entity that (1) has revenues of less than was made or reaffirmed without a reasonable basis $25,000,000, (2) is a United States or Canadian qualitative information about market or was disclosed other than in good faith. See Rule issuer, (3) is not an investment company, and (4) risk would be required explicitly for 175 under the Securities Act of 1933 and Rule 3b– if a majority owned subsidiary, the parent many different types of registrants, 6 under the Securities Exchange Act of 1934. The corporation is also a small business issuer. An including, for example, commercial and Commission has been re-examining Rules 175 and entity is not a small business issuer, however, if it 3b–6. See Securities Act Release No. 7101 (October has a public float (the aggregate market value of the industrial companies, financial 13, 1994), 59 FR 52723 (October 19, 1994). outstanding securities held by non-affiliates) of institutions, broker dealers, service 70 Private Securities Litigation Reform Act of $25,000,000 or more, 17 CFR 230.405. companies, business development 1995, Pub. L. No. 104–67 (December 22, 1995). 72 See note 33, supra. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 589 issuers of quantitative and qualitative appropriate (six months, one year, or defined above. For example, other information about market risk. some other time period)? financial instruments include trade accounts receivable, investments, loans, In addition, those foreign private C. Scope and Definition of Instruments issuers that prepare financial statements structured notes, mortgage-backed in accordance with Item 18 of Form 20– For purposes of this release, financial securities, trade accounts payable, F would be required to provide instruments, derivative financial indexed debt instruments, interest-only descriptions in the footnotes to the instruments, other financial and principal-only obligations, deposits, financial statements of the policies used instruments, and derivative commodity and other debt obligations. However, for to account for derivatives. In contrast, instruments are defined as follows. purposes of this release, trade accounts foreign private issuers that prepare ‘‘Financial instruments’’ have the same receivable and trade accounts payable meaning as that set forth in paragraph should not be considered other financial financial statements in accordance with 75 Item 17 of Form 20–F are not required 3 of FAS 107. ‘‘Derivative financial instruments when their carrying to provide financial statement instruments’’ are a subset of financial amounts approximate fair value. disclosures required by generally instruments and include futures, Commodity derivative instruments forwards, swaps, options, and other accepted accounting principles and include, to the extent such instruments financial instruments with similar Regulation S–X, including disclosures are not derivative financial instruments, 73 characteristics, as defined by paragraphs about accounting policies. Thus, the 76 commodity futures, commodity 5–7 of FAS 119. forwards, commodity swaps, proposed amendments requiring Other financial instruments include commodity options, and other disclosures of accounting policies all financial instruments as defined in commodity instruments with similar would not apply to foreign private paragraph 3 of FAS 107, except for characteristics, that are reasonably issuers filing under Item 17 of Form 20– derivative financial instruments, as F. However, foreign private issuers possible to be settled in cash or with another financial instrument.77 filing under Item 17 of Form 20–F 75 FAS 107 ¶ 3 states: would need to consider the guidance A financial instrument is defined as cash, Thus, the instrument definitions presented in Staff Accounting Bulletin evidence of an ownership interest in an entity, or described above do not encompass (i) Topic 1:D (‘‘SAB Topic 1:D’’) to a contract that both: commodity positions, (ii) derivative determine if information regarding a. Imposes on one entity a contractual obligation commodity instruments that are not (1) to deliver cash or another financial instrument accounting policies for derivatives to a second entity or (2) to exchange other financial reasonably possible to be settled in cash should be provided in MD&A.74 instruments on potentially unfavorable terms with or with another financial instrument the second entity. (e.g., a commodity forward contract that 2. Request for Comment b. Conveys to that second entity a contractual must be settled in the commodity), (iii) right (1) to receive cash or another financial cash flows from anticipated Should foreign private issuers be instrument from the first entity or (2) to exchange subject to the proposed amendments? In other financial instruments on potentially favorable transactions, and/or (iv) operating cash particular, are the proposed differences terms with the first entity. flows from non-financial and non- in disclosure that would be applicable 76 FAS 119 ¶¶ 5–7 state: commodity instruments.78 to foreign private issuers that file under 5. For purposes of this Statement, a derivative financial instrument is a futures, forward, swap, or D. Reporting Frequency Items 17 and 18 of Form 20–F option contract, or other financial instrument with appropriate? For example, should similar characteristics. 1. Discussion foreign private issuers filing under Item 6. Examples of other financial instruments with The proposed amendments would characteristics similar to option contracts include 17 of Form 20–F be required to provide apply to all registration statements filed accounting policies disclosures? Should interest rate caps or floors and fixed-rate loan commitments. Those instruments have under the Securities Act and all reports application of some or all of the characteristics similar to options in that they and proxy and information statements proposed amendments to foreign private provide the holder with benefits of favorable filed under the Exchange Act that are movements in the price of an underlying asset or issuers be delayed to provide them more required to include or incorporate time to become familiar with and index with limited or no exposure to losses from unfavorable price movements, generally in return financial statements. However, for implement the amendments? If so, for a premium paid at inception by the holder to reports that only include interim which portions of the proposed the issuer. Variable-rate loan commitments and financial statements (e.g., Form 10–Qs), other variable-rate financial instruments also may amendments should be delayed and the proposed amendments would need what period of delay would be have characteristics similar to option contracts. For example, contract rate adjustments may lag changes to be complied with only to the extent in market rates or be subject to caps or floors. there has been a material change in the 73 Foreign private issuers complying with Item 18 Examples of other financial instruments with information disclosed as of the of Form 20–F must provide all information required characteristics similar to forward contracts include by US generally accepted accounting principles and various kinds of commitments to purchase stocks or preceding fiscal year end. Thus, for Regulation S–X. Disclosures required by US bonds, forward interest rate agreements, and example, the quantitative and generally accepted accounting principles but not interest rate collars. Those instruments are similar qualitative information about market required by foreign generally accepted accounting to forwards in that they provide benefits of risk required by the proposed principles on which the financial statements are favorable movements in the price of an underlying prepared need not be furnished pursuant to Item 17 asset or index and exposure to losses from amendments would be included in of Form 20–F. Compliance with Item 17 of Form unfavorable price movements, generally with no interim filings only if there was a 20–F is acceptable for registration statements or payments at inception. material change in that information annual reports on Form 20–F. With certain 7. The definition of derivative financial when compared to the information exceptions, foreign private issuers offering instrument in paragraph 5 excludes all on-balance- securities must comply with Item 18 of Form 20– sheet receivables and payables, including those that F. ‘‘derive’’ their values or contractually required cash 77 The term ‘‘reasonably possible’’ as used in the 74 SAB Topic 1:D provides several examples of flows from the price of some other security or proposed rulemaking amendments is consistent disclosures in MD&A that might be necessary to index, such as mortgage-backed securities, interest- with ¶ 3 of FAS 5, which defines ‘‘reasonably enable readers to understand the financial only and principal-only obligations, and indexed possible’’ to mean the chance of a future transaction statements as a whole. One of those example debt instruments. It also excludes option features or event occurring is more than remote but less than disclosures includes significant accounting policies that are embedded within an on-balance-sheet likely. and measurement assumptions which may bear receivable or payable, for example, the conversion 78 See section III B1b(v), supra, for a further upon an understanding of operating trends or feature and call provisions embedded in convertible description of the instruments, positions, and financial condition. bonds. transactions described in this paragraph. 590 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules presented as of the end of the preceding indirectly, the terms, fair values, or cash about market risk sensitive instruments, fiscal year. flows, of the reported items. This would including derivative instruments, more include derivative transactions that are understandable to investors and others. 2. Request for Comment designated to reported items under This increased understanding is Is the frequency of reporting proposed generally accepted accounting expected to enhance the ability of in the amendments adequate? principles.80 investors to make investment decisions Alternatively, given that market risk Thus, for example, information and also improve the efficiency of sensitive instruments allow a registrant required to be disclosed in the footnotes markets. The Commission believes these to change rapidly its exposures to to the financial statements about the benefits will outweigh the related costs, market risk, should the proposed interest rates and repricing which are discussed below. disclosures be provided in all interim characteristics of debt obligations B. Descriptions of Accounting Policies filings? should include, when material, the for Derivatives V. General Request for Comment effects of derivatives. Similarly, summary information and disclosures in FAS 119 was designed, in part, to The Commission seeks comment from MD&A about the interest costs of debt help investors and others understand all interested persons wishing to obligations should include, when how derivative financial instruments are address any aspect of the proposed material, disclosure of the effects of reported in the financial statements.82 amendments. In addition to the requests derivatives. Likewise, when derivatives Thus, FAS 119 requires, among other for comments listed throughout this directly or indirectly affect the terms things, disclosure of the policies used to release, the Commission also is and cash flows of items such as account for derivative financial requesting comment on whether the securities held as assets, servicing instruments, pursuant to the proposed amendments, if adopted, 83 rights, oil and gas reserves, loan requirements of APB 22. However, the would have an adverse impact on receivables, deposit liabilities, and scope of FAS 119 is limited to competition or would impose a burden leases, disclosure about the terms and derivative financial instruments; on competition that is neither necessary cash flows of these items should therefore, it does not apply to other nor appropriate in furthering the include, when material, disclosure of derivative instruments with similar purposes of the Securities Act and the the effects of derivatives to the extent characteristics, such as derivative Exchange Act. Comments in this regard such disclosure is necessary to prevent commodity instruments. In addition, will be considered by the Commission the disclosure about the reported item FAS 119 does not provide explicit in complying with its responsibilities from being misleading. guidance indicating what must be under Section 23(a) of the Exchange described in accounting policies Act, 15 U.S.C. 78w(a). VII. Cost-Benefit Analysis footnotes to make the financial VI. Disclosure of the Effects of A. Background statement effects of derivatives more understandable. The SEC staff found Derivative Instruments on Reporting To assist the Commission in its that the accounting policies footnotes Financial Instruments, Commodity evaluation of the costs and benefits that for derivatives often were too general in Positions, Firm Commitments, and may result from the proposed disclosure nature, not reflecting adequately the Anticipated Transactions requirements discussed in this release, many choices made by registrants in In conjunction with the publication commenters are requested to provide today of proposed rules to require their accounting for derivatives. views and data relating to any costs and The current proposed amendments specific additional disclosures benefits associated with the proposed require descriptions of accounting concerning market risk sensitive amendments. In general, the proposed instruments, including derivatives, the policies for derivative financial amendments clarify existing standards instruments and derivative commodity Commission is taking this opportunity and rules, include additional to remind registrants of existing instruments, unless the registrant’s instruments within existing standards, derivative activities are not material. obligations that may already require and provide alternatives for quantitative certain disclosures about derivatives. Thus, the scope of the proposed disclosures regarding market risk amendments is broader than the scope The staff’s 1994 and 1995 reviews of sensitive instruments. In particular, the registrant filings suggested that some of FAS 119. In addition, to help make proposed amendments provide: clear the impact of derivatives on the registrants may not be providing 1. Enhanced descriptions of financial statements, the proposed sufficient disclosure about how accounting policies for derivative amendments make explicit the items to derivatives directly or indirectly affect financial instruments and derivative be disclosed in the accounting policies reported items. As a result, those commodity instruments; footnotes. disclosures that are being made may not 2. Quantitative disclosures about The proposed amendments are likely accurately reflect such matters as the market risk; and to result in a more focused and effective terms or expected cash flows of 3. Qualitative disclosures about descriptive discussion of the accounting the reported items. market risk. It is fundamental that registrants must The Commission is proposing these policies for both derivative financial include in any filings or reports any amendments in response to requests instruments and derivative commodity material information that may be from investors and others to provide instruments. This additional necessary to make statements made, in more meaningful information about information is likely to result in light of the circumstances under which market risk sensitive instruments.81 The additional preparation, audit, and they are made, not misleading.79 That is, expected benefits of these proposed printing costs. However, because registrants must provide disclosure amendments are to make information accounting policies for these about derivatives that affect, directly or instruments are known by registrants 80 See, e.g., FAS 52 ¶ 21a and FAS 80 ¶ 4a. and should be known by their auditors, 79 See, e.g., Rule 12b–20, 17 CFR 240.12b–20, 81 See notes 23–29, supra, for examples of under the Securities Exchange Act of 1934 investors, regulators, and other private bodies 82 See FAS 119 ¶ 60. (‘‘Exchange Act’’) and Rule 408, 17 CFR 230.408 endorsing or recommending improved quantitative 83 See FAS 119 ¶ 8. See also note 39, supra, for under the Securities Act of 1933 (‘‘Securities Act’’). disclosures about market risk. a discussion of the requirements of APB 22. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 591 most of the preparation and audit costs analyses recently have been made and their market risk management are expected to relate to initial available at a relatively moderate cost.85 activities. The Commission believes this compliance with the proposed Moreover, some registrants are required should present a more complete amendments. These costs, along with to prepare such information for discussion of a registrant’s exposure to expected printing costs, are not regulatory capital measurement market risks and the way it manages estimated to be significant. Other costs, purposes. In particular, thrift those risks. Because this information is such as ongoing recordkeeping and institutions are required to prepare fair likely to be used by registrants as part compliance costs, also are not expected value sensitivity analysis amounts for of their risk management activities, to be significant. risk-based capital purposes.86 Also, incremental costs relating to such bank holding companies may be disclosure are not expected to be C. Quantitative Information About required, under a proposed rulemaking significant. Market Risk requirement, to prepare a value at risk As discussed earlier in this release, analysis for risk-based capital E. Small Business Issuers under the proposed amendments, purposes.87 Thus, the costs associated As noted earlier, the Commission has registrants would be required to present with the sensitivity and value at risk determined not to amend Regulation S- quantitative information about market analyses may vary depending on (i) B 89 to incorporate an item similar to risk. An important aspect of this whether the registrant currently engages Item 305 of Regulation S-K. Regulation requirement, from a cost perspective, is in these analyses for other management S-B may be used by small business that registrants will have the flexibility or regulatory purposes and (ii) the issuers 90 required to register their to choose one of three disclosure particular model and assumptions used securities with the Commission. By alternatives (tabular presentation, in the registrant’s calculations. Any excluding small business issuers from sensitivity analysis, or value at risk) to registrant that believes the cost of such all but the accounting policies provide such quantitative information analyses outweigh the benefits of disclosures that would be required by about market risk. disclosing them, however, may elect to the proposed amendments, the The Commission believes that, for provide tabular presentation of Commission has limited substantially registrants electing to provide tabular information about market risk sensitive the cost of these proposals for small disclosure, much of the required instruments. entities. information is currently available. Thus, The Commission will reassess D. Qualitative Information About additional costs relating to reporting, recordkeeping, compliance Market Risk recordkeeping are not expected to be requirements, and other cost-benefit significant. While increased reporting FAS 119 requires certain qualitative issues in light of comments it receives and compliance burdens may result, in disclosures about the market risk in response to the proposed many cases the information presented in management activities associated with amendments. the tabular disclosures is used in derivative financial instruments held or VII. Summary of Initial Regulatory managing the business activities of the issued for purposes other than trading. Flexibility Analysis registrant and, therefore, may be In particular, FAS 119 requires available at relatively low incremental disclosure of ‘‘the entity’s objectives for The Commission has prepared an costs. Further, registrants complying holding or issuing the derivative Initial Regulatory Flexibility Analysis with Securities Act Industry Guide 3,84 financial instruments, the context pursuant to the requirements of the principally financial institutions, needed to understand those objectives, Regulatory Flexibility Act,91 regarding already disclose a significant amount of and its general strategies for achieving the proposed amendments to Rule 4–08 88 the requested information. those objectives.’’ However, as of Regulation S–X and to Regulation S– Registrants that choose to use either indicated above, these requirements of K to create Item 305. Additionally, the the sensitivity or value at risk disclosure FAS 119 only apply to certain derivative Commission is proposing amendments alternatives may incur significant financial instruments, and the SEC staff to Forms S–1, S–2, S–4, S–11, and F– additional costs if they currently do not has observed that these disclosures 4 under the Securities Act of 1933, and use these methodologies to manage typically have been general in nature, Rule 14a–3, Schedule 14A and Forms market risk. In contrast, if registrants providing only limited insight into an 10, 20–F, 10–Q, and 10–K under the currently use sensitivity or value at risk entity’s overall market risk management Exchange Act. The analysis notes that analyses to manage market risk, the activities. the amendments would clarify existing Commission believes that any In essence, the proposed amendments disclosure requirements, include additional costs associated with expand certain disclosure requirements additional instruments within existing complying with the proposed set forth in FAS 119 to (i) encompass disclosure requirements, and provide amendments are likely to be negligible. derivative financial instruments entered disclosure alternatives for quantitative In addition, the Commission into for trading purposes, other financial information regarding derivative understands that some of the data and instruments, and derivative commodity financial instruments, other financial the systems needed to develop these instruments and (ii) require registrants instruments, and derivative commodity to evaluate and describe material instruments. These amendments are changes in their primary risk exposures 84 Securities Act Industry Guide 3, ‘‘Statistical intended to provide investors with Disclosure by Bank Holding Companies.’’ Exchange information that provides a clearer 85 Act Industry Guide 3 is identical to the Securities See Wall Street Journal, ‘‘Morgan Unveils the understanding of registrants’ use of such Act guide. Detailed disclosures are required under Way It Measures Market Risk’’ C1 (October 11, Guide 3 of, among other things, the registrant’s: (i) 1994). instruments, and the market risks distribution of assets, liabilities and stockholders’ 86 See note 51, supra. inherent in those instruments. equity; interest rates and interest differential; (ii) 87 See Department of the Treasury, Notice of The analysis notes that, although the investment portfolio; (iii) loan portfolio (including Proposed Rulemaking, ‘‘Risk-Based Capital proposed amendments may increase the types of loans, maturities and sensitivities of loans Standards: Market Risk,’’ 60 FR 38082 (July 25, to changes in interest rates, risk elements, and loans 1995): see also Federal Reserve System, Request of outstanding in foreign countries); (iv) summary of Comments, ‘‘Capital Requirements for Market 89 17 CFR 228.10 et seq. loan loss experience; (v) deposits; (vi) return on Risk,’’ 60 FR 38142 (July 25, 1995). 90 See note 71, supra. equity and assets; and (vii) short-term borrowings. 88 See FAS 119 ¶ 11a. 91 5 U.S.C. § 603. 592 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules reporting burden for those registrants (n) Accounting policies for certain about Derivative Financial Instruments and not currently providing comparable derivative instruments. In connection Fair Value of Financial Instruments,’’ disclosures, there should not be a with the accounting policies disclosures paragraphs 5–7, (October 1994) (‘‘FAS 119’’)), significant impact on recordkeeping or required by generally accepted and includes futures, forwards, swaps, options, and other financial instruments with other compliance burdens. The analysis accounting principles, identify and similar characteristics. also indicates that the proposals do not describe all accounting principles and (ii) Derivative commodity instruments conflict or overlap with existing the methods of applying those include, to the extent such instruments are requirements but rather tailor them for principles that affect the recognition not derivative financial instruments, specific purposes. and measurement of derivative financial commodity futures, commodity forwards, As more fully discussed in the instruments and derivative commodity commodity swaps, commodity options, and analysis and noted in the Cost-Benefit instruments, as defined in the other commodity instruments with similar Analysis section of this release, the instructions to this paragraph, unless characteristics that are reasonably possible to be settled in cash or with another financial Commission has determined not to the registrant’s derivatives activities are amend Regulation S–B to incorporate an instrument. For purposes of this paragraph, not material. Materiality of derivative the term ‘‘reasonably possible’’ has the same item similar to proposed Item 305 of activities shall be measured by the fair meaning as defined by generally accepted Regulation S–K. The Commission, values of derivative financial instrument accounting principles (see, e.g., FASB, therefore, has reduced the impact of the and derivative commodity instruments Statement of Financial Accounting proposed amendments on small at the end of each reporting period and Standards No. 5 ‘‘Accounting for business issuers. the fair value of those instruments Contingencies,’’ paragraph 3 (March 1975)). during each reporting period. This 3. For purposes of these instructions, Request for Comment ‘‘anticipated transactions’’ means description shall include: Written comments are encouraged transactions (other than transactions (1) A description of each method used involving existing assets or liabilities or with respect to any aspect of the Initial to account for derivative financial Regulatory Flexibility Analysis. Such transactions necessitated by existing firm instruments and derivative commodity commitments) an enterprise expects, but is comments will be considered in instruments; not obligated, to carry out in the normal preparation of the Final Regulatory (2) The types of derivative financial course of business (see, e.g., FASB, Statement Flexibility Analysis if the proposed instruments and derivative commodity of Financial Accounting Standards No. 80, amendments are adopted. A copy of the instruments accounted for under each ‘‘Accounting for Futures Contracts,’’ Initial Regulatory Flexibility Analysis method; paragraph 9, (August 1984)). may be obtained by contacting Robert E. (3) The criteria required to be met for 4. For purposes of paragraphs 4–08(n)(2), 4–08(n)(3), 4–08(n)(4), and 4–08(n)(7) Burns, Chief Counsel, Office of the Chief each accounting method used (e.g., the Accountant, at (202) 942–4400, registrants should distinguish derivative manner in which the type of risk financial instruments and derivative Securities and Exchange Commission, reduction, correlation, designation, and/ commodity instruments entered into for 450 Fifth Street, NW., Mail Stop 11–3, or effectiveness tests are applied); trading purposes from those instruments that Washington, DC 20549. (4) The accounting method used if the are entered into for purposes other than List of Subjects in 17 CFR Parts 210, specified criteria are not met; trading. For purposes of this paragraph, ‘‘trading purposes’’ has the same meaning as 228, 229, 239, 240, and 249 (5) The accounting for terminations of derivatives designated as hedges or used defined by generally accepted accounting Accounting, Reporting and to affect directly or indirectly the terms, principles (see, e.g., FASB, Statement of recordkeeping requirements, Securities. Accounting Standards No. 119, ‘‘Disclosure fair values, or cash flows of a designated about Derivative Financial Instruments and Text of Proposed Amendments item; Fair Value of Financial Instruments,’’ (6) The accounting for derivatives if In accordance with the foregoing, paragraph 9a, (October 1994)). the designated item matures, or is sold, Title 17, Chapter II of the Code of extinguished, terminated, or, if related PART 228ÐINTEGRATED Federal Regulations is proposed to be to an anticipated transaction, is no DISCLOSURE SYSTEM FOR SMALL amended as follows: longer likely to occur; and BUSINESS ISSUERS (7) Where and when derivative PART 210ÐFORM AND CONTENT OF 3. The authority citation for Part 228 financial instruments and derivative AND REQUIREMENTS FOR FINANCIAL continues to read as follows: STATEMENTS, SECURITIES ACT OF commodity instruments and their 1933, SECURITIES EXCHANGE ACT related gains and losses are reported in Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77aa(25), 77aa(26), 77ddd, 77eee, OF 1934, PUBLIC UTILITY HOLDING the statements of financial position, cash flows, and results of operations. 77ggg, 77hhh, 77jjj, 77nnn, 77sss, 78l, 78m, COMPANY ACT OF 1935, INVESTMENT 78n, 78o, 78w, 78ll, 80a–8, 80a–29, 80a–30, COMPANY ACT OF 1940, AND Instructions to Paragraph 4–08(n). 1. In 80a–37, 80b–11, unless otherwise noted. preparing the accounting policies disclosures ENERGY POLICY AND 4. By amending the NOTES to CONSERVATION ACT OF 1975 under this paragraph 4–08(n), registrants should include those derivative financial § 228.310 by revising the first sentence 1. The authority citation for Part 210 instruments and derivative commodity of note 2 to read as follows: continues to read as follows: instruments that are held during, or § 228.310 (Item 310) Financial Statements. outstanding at the end of, each reporting Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, Notes—1. * * * 77aa(25), 77aa(26), 78l, 78m, 78n, 78o(d), period. 78w(a), 78ll(d), 79e(b), 79j(a), 79n, 79t(a), 2. For purposes of this paragraph 4–08(n), 2. Regulation S–X [17 CFR 210.1– 80a–8, 80a–20, 80a–29, 80a–30, 80a–37a, derivative financial instruments and 210.12] Form and Content of and unless otherwise noted. derivative commodity instruments are Requirements for Financial Statements defined as follows: shall not apply to the preparation of 2. By amending § 210.4–08 by adding (i) Derivative financial instruments have paragraph (n) to read as follows: the same meaning as defined by generally such financial statements, except that accepted accounting principles (see, e.g., the report and qualifications of the § 210.4±08 General notes to financial Financial Accounting Standards Board independent accountant shall comply statements. (‘‘FASB’’), Statement of Financial with the requirements of article 2 of * * * * * Accounting Standards No. 119, ‘‘Disclosure regulation S–X [17 CFR 210.2], articles Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 593

3–19 and 3–20 [17 CFR 210.3–19 and (iv) Receive fixed or receive variable (3) The percentage of time the actual 210.3–20] shall apply to financial interest rate swaps; and changes in fair values, earnings, or cash statements of foreign private issuers, the (v) The currency in which the flows of market risk sensitive description of accounting policies shall instruments’ cash flows are instruments exceeded the reported comply with article 4–08(n) of denominated. value at risk amounts during the current regulation S–X [17 CFR 210.4–08(n)], (3) For each instrument in the table, reporting period; (The information in and small business issuers engaged in expected cash flow information should this paragraph (a)(1)(iii)(B) is not oil and gas producing activities shall be presented separately for each of the required for [the first fiscal year end for follow the financial accounting and next five years with the remaining which this section is effective]), and reporting standards specified in article expected cash flows presented as an (C) A description of the model 4–10 of Regulation S–X [17 CFR 210.4– aggregate amount. Derivatives used to assumptions and parameters necessary 10] with respect to such activities. manage risks inherent in anticipated to an understanding of the disclosures *** transactions also should be disclosed required under paragraphs (a)(1)(iii) (A) * * * * * separately; and and (B) of this item 305. (B) A description of assumptions (2) Registrants shall discuss material PART 229ÐSTANDARD necessary to an understanding of the limitations that may cause the INSTRUCTIONS FOR FILING FORMS disclosures required under paragraph information required under paragraph UNDER SECURITIES ACT OF 1933, (a)(1)(i) (A) of this item 305 (see the (a)(1) of this item 305 not to reflect the SECURITIES EXCHANGE ACT OF 1934 appendix to this Item for a suggested overall market risk of the entity. This AND ENERGY POLICY AND tabular format for presentation of this discussion shall include descriptions of: (i) Each limitation; and CONSERVATION ACT OF 1975Ð information), or REGULATION S±K (ii) If applicable, the instruments’ (ii)(A) Sensitivity analyses that features that are not reflected fully 5. The authority citation for part 229 express the hypothetical loss in future within the selected quantitative market continues to read in part as follows: earnings, fair values, or cash flows of risk disclosure alternative. market risk sensitive instruments Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, (3) Registrants shall present 77k, 77s, 77aa(25), 77aa(26), 77ddd, 77eee, resulting from at least one selected summarized information for the 77ggg, 77hhh, 77iii, 77jjj, 77nnn, 77sss, 78c, hypothetical change in interest rates, preceding fiscal year. Registrants also 78i, 78j, 78l, 78m, 78n, 78o, 78w, 78ll(d), 79e, currency exchange rates, commodity shall discuss the reasons for material 79n, 79t, 80a–8, 80a–29, 80a–30, 80a–37, prices, and similar market rates or changes in quantitative information 80b–11, unless otherwise noted. prices over a selected time period. The about market risk when compared to the * * * * * magnitude of each selected hypothetical information reported in the previous 6. By adding § 229.305 (Item 305) to change in rates or prices may differ period. Information required by this read as follows: across risk exposures. Separate paragraph (a)(3) of item 305, however, is sensitivity analysis disclosures should § 229.305 (Item 305) Quantitative and not required if disclosure is not required qualitative disclosures about market risk. be made for each category of risk pursuant to paragraph (a)(1) of this item exposure, i.e., interest rate risk, foreign 305 for the current fiscal year. (a) Quantitative information about currency exchange rate risk, commodity market risk. (1) To the extent material, Information required by this paragraph price risk, and other similar market registrants shall provide quantitative (a)(3) of item 305 is not required [for the risks, such as equity price risk; and disclosures about market risk, as of the first fiscal year end in which item 305 (B) A description of the model end of the latest fiscal year. Such is effective]. assumptions and parameters necessary disclosures should be provided using (4) Registrants may change methods of to an understanding of the disclosures any one of the following three presenting quantitative information required under paragraph (a)(1)(ii) (A) of about market risk (e.g., changing from disclosure alternatives at the election of this item 305; or tabular presentation to value at risk). the registrant: (i)(A)(1) Tabular presentation of terms (iii)(A) Value at risk disclosures that However, if such a change is made the and information related to market risk express the potential loss in fair values, registrants shall: (i) Explain the reasons for the change; sensitive instruments; such information earnings, or cash flows from market and (e.g., expected cash flows by maturity movements (e.g., changes in interest rates, foreign currency exchange rates, (ii) Provide summarized comparable dates) should be categorized according information, under the new disclosure to risk exposure category (e.g., interest commodity prices, and other similar market rates or prices) over a selected method, for the year preceding the rate risk, foreign currency exchange rate current year. risk, commodity price risk, and other time period with a selected likelihood of similar market risks, such as equity occurrence; value at risk disclosures Instructions to Paragraph 305(a). price risk), and within the foreign should be made on an aggregate basis 1. In preparing the disclosures under for all market risk sensitive instruments paragraph 305(a), registrants are required to currency exchange rate risk category, by include derivative financial instruments, functional currency (e.g., U.S. dollar, and for each category of market risk exposure, such as interest rate risk, other financial instruments, and derivative Japanese yen). commodity instruments, as specified in the (2) Within each of these risk exposure foreign currency exchange rate risk, General Instructions to Paragraphs 305(a) and categories, instruments should be commodity price risk, and other similar 305(b). grouped based on common market risks, such as equity price risk; 2. In preparing disclosures under characteristics. At a minimum, (B) For each risk exposure category paragraph 305(a), registrants should instruments should be distinguished by either: distinguish derivative financial instruments, other financial instruments, and derivative the following characteristics: (1) The average or range in the value at risk numbers for the reported period; commodity instruments entered into for (i) Fixed rate or variable rate assets or trading purposes from those instruments that liabilities; (2) The average or range in actual are entered into for purposes other than (ii) Long or short forwards or futures; changes in fair values, earnings, or cash trading. (iii) Written or purchased put or call flows of instruments occurring during 3. In preparing disclosures under options; the reporting period; or paragraph 305(a), registrants may include 594 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules other market risk sensitive instruments, described include, but are not limited to, commodity instruments, as defined in the positions, and transactions that are not how loss is defined by the model (e.g., loss General Instructions to Paragraphs 305(a) and addressed in instruction 1. to paragraph in earnings, fair values, or cash flows), type 305(b). 305(a). Such instruments, positions, and of model used (e.g., variance/covariance, 2. In preparing disclosures under transactions might include commodity historical simulation, Monte Carlo paragraph 305(b), the qualitative information positions, derivative commodity instruments simulation, and how optionality is addressed about market risk should be presented that are not reasonably possible to be settled by the model), the types of instruments separately for derivative financial in cash or with another financial instrument, covered by the model (e.g., derivative instruments, other financial instruments, and cash flows from anticipated transactions, and financial instruments, other financial derivative commodity instruments that are operating cash flows from non-financial and instruments, derivative commodity entered into for trading purposes and those non-commodity instruments (e.g., cash flows instruments, and whether other instruments that are entered into for purposes other than generated by manufacturing activities). are included voluntarily, such as certain trading. In addition, qualitative information Registrants choosing to include voluntarily commodity instruments and positions, cash about market risk should be presented these instruments, positions, and cash flows flows from anticipated transactions, and separately for those instruments used to for purposes of paragraphs 305(a)1(ii) and operating cash flows from non-financial and manage risks inherent in anticipated 305(a)1(iii) are required to state that they non-commodity instruments), and other transactions. have included such instruments, positions, relevant information on model parameters, 3. Primary market risk exposures, for the and cash flows. (e.g., holding period, confidence interval, and purposes of this paragraph, mean: 4. Under paragraph 305(a)(1)(i): the method used for aggregating value at risk (A) The following categories of market risk: (A) The examples of terms and information amounts across market risk exposure interest rate risk, foreign currency exchange relating to market risk sensitive instruments categories, such as by assuming perfect rate risk, commodity price risk, and other that should be disclosed include, but are not positive correlation, independence, or actual similar market rate or price risks (e.g., equity limited to, the instruments’ fair values, observed correlation). prices); and expected principal or transaction cash flows, 7. Under paragraph 305(a)(2), limitations (B) Within each of these categories, the weighted average effective rates or prices, that should be considered include, but are particular markets that present the primary and other relevant market risk related risk of loss to the registrant. For example, if information; not limited to: (A) The exclusion of certain market risk a registrant has a material exposure to foreign (B) Functional currency means functional currency exchange rate risk and, within this currency as defined by generally accepted sensitive instruments, positions, and transactions from the disclosures required category of market risk, is most vulnerable to accounting principles (see, e.g., FASB, changes in dollar/yen, dollar/pound, and Statement of Financial Accounting under paragraph 305(a)(1) (e.g., derivative dollar/peso exchange rates, the registrant Standards No. 52, ‘‘Foreign Currency commodity instruments not reasonably would disclose these exposures. Similarly, if Translation’’, (‘‘FAS 52’’) Appendix E possible to be settled in cash or with another a registrant has a material exposure to (December 1981); financial instrument, commodity positions, interest rate risk and, within this category of (C) Model assumptions that should be cash flows from anticipated transactions, and market risk, is most vulnerable to changes in described include, but are not limited to, operating cash flows from non-financial and specification of the differing numbers non-commodity instruments, such as cash short-term U.S. prime interest rates, it would reported in the table for various categories of flows from manufacturing activities). Failure disclose this exposure. instruments (e.g., principal cash flows for to include such instruments, positions, and 4. For purposes of disclosure under debt, notional amounts for swaps, and transactions in preparing the disclosures paragraph (b) of this item 305, registrants contract amounts for options and futures) under paragraph 305(a)(1) may be a should describe primary market risk and key prepayment and/or reinvestment limitation because the resulting information exposures that exist at the end of the current assumptions relating to the timing of may not fully reflect the overall market risk reporting period, and how those exposures reported cash flow amounts; and of a registrant; and are managed. (D) Market risk sensitive instruments that (B) The ability of disclosures required General Instructions to Paragraphs 305(a) are exposed to rate or price changes in more under paragraph 305(a)(1) to reflect fully the and 305(b). than one market risk exposure category market risk that may be inherent in 1. The disclosure called for by paragraphs should be presented within the tabular instruments with leverage, option, or 305(a) and 305(b) is intended to clarify the information under each of those risk prepayment features (e.g., structured notes, registrant’s exposure to market risks exposure categories. collateralized mortgage obligations, leveraged associated with activities in derivative 5. Under paragraph 305(a)(1)(ii), model swaps, and swaps with embedded written financial instruments, other financial assumptions and parameters that should be options). instruments, and derivative commodity instruments. described include, but are not limited to, (b) Qualitative information about how loss is defined by the model (e.g., loss 2. For purposes of paragraphs 305(a) and in earnings, fair values, or cash flows), a market risk. To the extent material, 305(b), derivative financial instruments, general description of the modeling describe: other financial instruments, and derivative technique (e.g., change in net present values (1) The registrant’s primary market commodity instruments (referred collectively arising from parallel shifts in market rates or risk exposures; as ‘‘market rate sensitive instruments’’ or prices and how optionality is addressed by (2) How those exposures are managed ‘‘instruments’’) are defined as follows: the model), the types of instruments covered (e.g., a description of the objectives, (A) Derivative financial instruments has by the model (e.g., derivative financial the same meaning as defined by generally general strategies, and instruments, if accepted accounting principles (see, e.g., instruments, other financial instruments, any, used to manage those exposures); derivative commodity instruments, and FASB, Statement of Financial Accounting whether other instruments are included and Standards No. 119, ‘‘Disclosure about voluntarily, such as certain commodity (3) Changes in either the registrant’s Derivative Financial Instruments and Fair instruments and positions, cash flows from primary market risk exposures or how Value of Financial Instruments,’’ paragraphs anticipated transactions, and operating cash those exposures are managed when 5–7, (October 1994)), and includes futures, flows from non-financial and non-commodity compared to what was in effect during forwards, swaps, options, and other financial instruments), and other relevant information the most recent reporting period and instruments with similar characteristics; on the model’s parameters, (e.g., the what is known or expected to be in (B) Other financial instruments means all financial instruments as defined by generally magnitudes of parallel shifts in market rates effect in future reporting periods. or prices used, the method by which accepted accounting principles (see, e.g., discount rates are determined, and key Instructions to Paragraph 305(b). FASB, Statement of Financial Accounting prepayment and/or reinvestment 1. The disclosures required by this Standards No. 107, ‘‘Disclosures about Fair assumptions). paragraph relate to the market risk exposures Value of Financial Instruments,’’ paragraph 6. Under paragraph 305(a)(1)(iii), model inherent in derivative financial instruments, 3, (December 1991)), except for derivative assumptions and parameters that should be other financial instruments, and derivative financial instruments, as defined above; Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 595

(C) Other financial instruments include, instruments outstanding at the end of the The tables set forth below are illustrative but are not limited to, trade accounts current reporting period, registrants generally of the format that might be used when a receivable, investments, loans, structured should not net fair values, except to the registrant elects to present the information notes, mortgage-backed securities, trade extent allowed under generally accepted required by paragraph (a)(1)(i)(A) of Item 305 accounts payable, indexed debt instruments, accounting principles (see, e.g., FASB regarding terms and information about interest-only and principal-only obligations, Interpretation No. 39, ‘‘Offsetting of Amounts derivative financial instruments, other deposits, and other debt obligations. Related to Certain Contracts’’ (March 1992)). financial instruments, and derivative However, for purposes of this release, trade For example, under this instruction, the fair commodity instruments. These examples are accounts receivable and trade accounts value of assets generally should not be netted for illustrative purposes only. Registrants are payable should not be considered other with the fair value of liabilities. In not required to display the information in the financial instruments when their carrying determining the materiality of the potential specific manner illustrated below. amounts approximate fair value; and loss in future earnings or fair values from Alternative methods of display are (D) Derivative commodity instruments reasonably possible market movements, permissible as long as the disclosure include, to the extent such instruments are requirements of the section are satisfied. not derivative financial instruments, registrants should consider both the magnitude of past market movements, as well Furthermore, these examples were designed commodity futures, commodity forwards, primarily to illustrate possible formats for commodity swaps, commodity options, and as expectations about the magnitude of future market movements. In addition, in making presentation of the information required by other commodity instruments with similar the proposed section and do not purport to characteristics that are reasonably possible to the determination under this instruction about the materiality of the potential loss in illustrate the broad range of derivative be settled in cash or with another financial financial instruments, other financial instrument. For purposes of paragraphs future earnings, fair values, or cash flows, registrants should consider, among other instruments, and derivative commodity 305(a) and 305(b) and these general instruments utilized by registrants. instructions, the term ‘‘reasonably possible’’ things, potential losses that may arise from has the same meaning as defined by generally leverage, option, and/or multiplier features. Interest Rate Sensitivity accepted accounting principles (see, e.g., 5. For purposes of presenting quantitative FASB, Statement of Financial Accounting and qualitative information about market The table below provides information Standards No. 5, ‘‘Accounting for risk, registrants generally should provide the about the Company’s derivative Contingencies,’’ paragraph 3 (March 1975)). required information in one location. financial instruments and other 3. For purposes of paragraphs 305(a) and However, alternative presentation, such as financial instruments that are sensitive 305(b), disclosure is not required for: inclusion of all or part of the information in to changes in interest rates, including (A) Commodity positions; the footnotes to the financial statements or in (B) Derivative commodity instruments that Management’s Discussion and Analysis, may interest rate swaps and debt obligations. are not reasonably possible to be settled in be used at the discretion of the registrant. For debt obligations, the table presents cash or with another financial instrument; 6. For purposes of the instructions to principal cash flows and related (C) Cash flows from anticipated paragraphs 305(a) and 305(b), ‘‘trading weighted average interest rates by transactions; and/or purposes’’ has the same meaning as defined expected maturity dates. Weighted (D) Operating cash flows from non- by generally accepted accounting principles average variable rates are based on financial and non-commodity instruments. (see, e.g., FASB, Statement of Financial implied forward rates in the yield curve 4. (A) For purposes of making a materiality Accounting Standards No. 119, ‘‘Disclosure at the reporting date. For interest rate assessment under paragraphs 305(a) and About Derivative Financial Instruments and swaps, the table presents notional 305(b), registrants should consider both: Fair Value of Financial Instruments,’’ amounts and weighted average interest (i) The materiality of the fair values of paragraph 9a (October 1994)). In addition, derivative financial instruments, other ‘‘anticipated transactions’’ means rates by expected (contractual) maturity financial instruments, and derivative transactions (other than transactions dates. Notional amounts are used to commodity instruments outstanding at the involving existing assets or liabilities or calculate the contractual payments to be end of the current reporting period; and transactions necessitated by existing firm exchanged under the contract. The (ii) The materiality of the potential loss in commitments) an enterprise expects, but is information is presented in U.S. dollar future earnings, fair values, or cash flows not obligated, to carry out in the normal equivalents, which is the Company’s from reasonably possible market movements. course of business (e.g., FASB, Statement of reporting currency. The instrument’s (B) If either (i) or (ii) of instruction 4.(A) Financial Accounting Standards No. 80, is material, then the disclosures under actual cash flows are denominated in ‘‘Accounting for Futures Contracts,’’ both U.S. dollar ($U.S.) and German paragraphs 305(a) and 305(b) are required. paragraph 9 (August 1984)). (C) In determining the materiality of the deutschmarks (DMs), as indicated in fair values of market risk sensitive Appendix to Item 305—Tabular Disclosures parentheses.

[Dollar amounts in millions]

Expected maturity date December 31, 19×1 Total Fair value × × × × × There- 19 2 19 3 19 4 19 5 19 6 after

Liabilities: Long-term Debt: Fixed Rate ($US) ...... $XXX $XXX $XXX $XXX $XXX $XXX $XXX $XXX Average interest rate ...... X.X% X.X% X.X% X.X% X.X% X.X% X.X% Fixed Rate (DMs) ...... XXX XXX XXX XXX XXX XXX XXX XXX Average interest rate ...... X.X% X.X% X.X% X.X% X.X% X.X% X.X% Variable Rate ($US) ...... XXX XXX XXX XXX XXX XXX XXX XXX Average interest rate ...... X.X% X.X% X.X% X.X% X.X% X.X% X.X% 596 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules

[Dollar amounts in millions]

Expected maturity date Interest Rate Derivatives Total Fair value × × × × × There- 19 2 19 3 19 4 19 5 19 6 after

Interest Rate Swaps: Variable to Fixed ($US) ...... $XXX $XXX $XXX $XXX $XXX $XXX $XXX $XXX Average pay rate ...... X.X% X.X% X.X% X.X% X.X% X.X% X.X% Average receive rate ...... X.X% X.X% X.X% X.X% X.X% X.X% X.X% Fixed to Variable ($US) ...... XXX XXX XXX XXX XXX XXX XXX XXX Average pay rate ...... X.X% X.X% X.X% X.X% X.X% X.X% X.X% Average receive rate ...... X.X% X.X% X.X% X.X% X.X% X.X% X.X%

Exchange Rate Sensitivity currency exchange rates, including transaction date, which are not expected foreign currency forward exchange to exceed two years. For foreign The table below provides information agreements, deutschmark (DM)- currency forward exchange agreements, about the Company’s derivative denominated debt obligations, and the table presents the notional amounts financial instruments, other financial firmly committed DM sales transactions. and weighted average exchange rates by instruments, and firmly committed sales For debt obligations, the table presents expected (contractual) maturity dates. transactions by functional currency and principal cash flows and related These notional amounts generally are presents such information in U.S. dollar weighted average interest rates by used to calculate the contractual 1 equivalents. The table summarizes expected maturity dates. For firmly payments to be exchanged under the information on instruments and committed DM-sales transactions, sales contract. transactions that are sensitive to foreign amounts are presented by the expected

Expected maturity date December 31, 19×1 Total Fair value × × × × × There- 19 2 19 3 19 4 19 5 19 6 after

(US$ Equivalent in Millions)

On-Balance Sheet Financial Instruments: $US Functional Currency 2 Liabilities Long-Term Debt (DM) ...... $XXX $XXX $XXX $XXX $XXX $XXX $XXX $XXX Average U.S. dollar/DM Exchange Rate ...... X.X X.X X.X X.X X.X X.X X.X

Expected maturity or transaction date Total Fair value × × × × × There- 19 2 19 3 19 4 19 5 19 6 after

(US$ Equivalent in millions)

Anticipated Transactions and Related Deriva- tives 3 $US Functional Currency: Firmly committed transactions: Sales Contracts (DM) ...... $XXX $XXX ...... $XXX $XXX Forward Exchange Agreements (Re- ceive $US/Pay DM) Contract Amount ...... XXX XXX ...... XXX XXX Average Exchange Rate ...... X.X X.X ...... X.X 2 Similar tabular information would be provided for other functional currencies. 3 Pursuant to Instruction 3 to proposed Item 305(a) of Regulation S±K, registrants may include cash flows from anticipated transactions and operating cash flows resulting from non-financial and non-commodity instruments.

Commodity Price Sensitivity the table presents the carrying amount expected maturity dates, the latest of The table below provides information and fair value at December 31, 19x1. For which occurs one year from the about the Company’s corn inventory the futures contracts the table presents reporting date. Contract amounts are and futures contracts that are sensitive the notional amounts in bushels, the used to calculate the contractual to changes in commodity prices, weighted average contract prices, and payments and quantity of corn to be specifically corn prices. For inventory, the total dollar contract amount by exchanged under the futures contracts.

1 The information is presented in U.S. dollars because that is the registrant’s reporting currency. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 597

× Carrying December 31, 19 1 amount Fair value

(In millions)

On Balance Sheet Commodity Position and Related Derivatives: Corn Inventory ...... $XXX $XXX 4

Expected maturity Fair value 1992

Related Derivatives: Futures Contracts (Short): Contract Volumes (100,000 bushels) ...... XXX ...... Weighted Average Price (Per 100,000 bushels) ...... $X.XX ...... Contract Amount ($US in millions) ...... $XXX $XXX 4 Pursuant to Instruction 3 to proposed Item 305 of Regulation S±K, registrants may include information on commodity positions, such as corn inventory.

PART 239ÐFORMS PRESCRIBED Item 11. Information With Respect to the (vii) Item 305 of Regulation S–K (§ 229.305 UNDER THE SECURITIES ACT OF 1933 Registrant of this chapter), quantitative and qualitative (a) * * * disclosures about market risk. 7. The authority citation for Part 239 (b) * * * * * * * * continues to read, in part, as follows: (9) Furnish quantitative and qualitative Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, disclosures about market risk required by Item 13. Incorporation of Certain Information 77sss, 78c, 78l, 78m, 78n, 78o(d), 78w(a), Item 305 of Regulation S–K (§ 229.305 of this by Reference 78ll(d), 79e, 79f, 79g, 79j, 79l, 79m, 79n, 79q, chapter). * * * * * 79t, 80a–8, 80a–29, 80a–30 and 80a–37, * * * * * (a) * * * unless otherwise noted. (3) * * * * * * * * Item 12. Incorporation of Certain Information (vii) Item 305 of Regulation S–K (§ 229.305 8. By amending Form S–1 (referenced by Reference. of this chapter) quantitative and qualitative in 239.11) by redesignating items 11(j) (a) * * * disclosures about market risk. through 11(m) as items 11(k) through (3) * * * * * * * * 11(n) and adding item 11(j) to read as (ix) quantitative and qualitative disclosures follows: about market risk as required by Item 305 of Item 14. Information With Respect to Regulation S–K (§ 229.305 of this chapter). Registrants Other Than S–3 or S–2 Note—The text of Form S–1 does not, and Registrants this amendment will not, appear in the Code * * * * * * * * * * of Federal Regulations. 10. By amending Form S–4 (j) Item 305 of Regulation S–K (§ 229.305 (referenced in § 239.25) by removing Form S–1 of this chapter), quantitative and qualitative ‘‘and’’ at the end of Item 12(b)(3)(v) and Registration Statement Under the Securities disclosures about market risk. Act of 1933 the period at the end of Item 12(b)(3)(vi) and in its place adding ‘‘; and’’, adding * * * * * * * * * * paragraph (vii) to Item 12(b)(3), Item 17. Information With Respect to Item 11. Information With Respect to the removing ‘‘and’’ at the end of Item Companies Other Than S–3 or S–2 Registrant 13(a)(3)(v) and the period at the end of Companies * * * * * Item 13(a)(3)(vi) and in its place adding * * * * * (j) Information required by Item 305 of ‘‘; and’’, adding paragraph (vii) to Item (b) * * * Regulation S–K (§ 229.305 of this chapter), 13(a)(3), removing ‘‘and’’ at the end of (10) Item 305 of Regulation S–K (§ 229.305 quantitative and qualitative disclosures about Item 14(h) and the period at the end of of this chapter), quantitative and qualitative market risk. Item 14(i) and in its place adding ‘‘; disclosures about market risk. * * * * * and’’, adding paragraph (j) to Item 14, * * * * * 9. By amending Form S–2 (referenced and adding paragraph (10) to Item 17(b) in § 239.12) by adding paragraph (9) to to read as follows: 11. By amending Form S–11 Item 11(b), removing ‘‘and’’ at the end (referenced in § 239.18) to redesignate Note—The text of Form S–4 does not, and of Item 12(a)(3)(vii), removing the this amendment will not, appear in the Code Items 30 through 36 as Items 31 through period at the end of Item 12(a)(3)(viii) of Federal Regulations. 37 and to add Item 30 to Part I to read and in its place adding ‘‘; and’’, and as follows: adding paragraph (ix) to Item 12(a)(3) to Form S–4 Note—The text of Form S–11 does not, and read as follows: Registration Statement Under the Securities this amendment will not, appear in the Code Note—The text of Form S–2 does not, and Act of 1933 of Federal Regulations. this amendment will not, appear in the Code * * * * * of Federal Regulations. Form S–11 Item 12. Information With Respect to S–2 or Registration Statement Under the Securities Form S–2 S–3 Registrants Act of 1933 Registration Statement Under the Securities * * * * * * * * * * Act of 1933 (b) * * * * * * * * (3) * * * 598 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules

Item 30. Quantitative and Qualitative § 240.14a±3 Information to be furnished (vii) Item 305 of Regulation S–K, Disclosures About Market Risk security holders. quantitative and qualitative disclosures about Furnish the information required by Item * * * * * market risk. * * * * * 305 of Regulation S–K (§ 229.305 of this (b) * * * chapter). (3) Information with respect to registrants (5) * * * other than S–2 or S–3 registrants. * * * * * (i) * * * (iii) The report shall contain the 12. By amending Form F–4 (A) * * * quantitative and qualitative disclosures (referenced in § 239.34) to redesignate (J) Item 305 of Regulation S–K, quantitative about market risk required by Item 305 Item 12(b)(3)(vi) as Item 12(b)(3)(vi)(A), and qualitative disclosures about market risk. of Regulation S–K (§ 229.305 of this add new paragraph (B) to Item * * * * * chapter). 12(b)(3)(vi), redesignate Item 14(g) as Instructions to Item 14. Item 14(g)(1), add new Item 14(g)(2), * * * * * * * * * * redesignate Item 17(b)(4) as Item 15. By amending § 240.14a–101 to 8. A registered management company need 17(b)(4)(i), and add new Item 17(b)(4)(ii) remove the word ‘‘and’’ at the end of not comply with Items (i), (iii), (iv), (v), (vi), to read as follows: and (viii) of paragraph (b)(2)(i)(B)(3) of this Item 13(a)(4), redesignate Item 13(a)(5) Item 14. Note—The text of Form F–4 does not, and as Item 13(a)(6), add Item 13(a)(5), add 9. A registered management company need this amendment will not, appear in the Code Instruction 6 to Item 13, remove ‘‘and’’ not comply with Items (i), (ii), (iii), (iv), (v), of Federal Regulations. at the end of Item 14(b)(2)(i)(B)(3)(vi) and (vii) of paragraph (b)(2)(ii)(A)(3) of this and the period at the end of Item Item 14. Form F–4 14(b)(2)(i)(B)(3)(vii) and in its place add 10. A registered management company Registration Statement Under the Securities ‘‘; and’’, add paragraph (viii) to Item need not comply with items (A), (B), (D), (F), Act of 1933 14(b)(2)(i)(B)(3), remove ‘‘and’’ at the (G), (H), and (J) of paragraph (b)(3)(i) of this Item 14. * * * * * end of Item 14(b)(2)(ii)(A)(3)(v) and the period at the end of Item * * * * * Item 12. Information With Respect to F–2 or 14(b)(2)(ii)(A)(3)(vi) and in its place add F–3 Registrants PART 249ÐFORMS, SECURITIES ‘‘; and’’, add paragraph (vii) to Item EXCHANGE ACT OF 1934 * * * * * 14(b)(2)(ii)(A)(3), remove ‘‘and’’ at the (b) * * * end of Item 14(b)(3)(i)(H) and the period 16. The authority for Part 249 (3) * * * at the end of Item 14(b)(3)(i)(I) and in its continues to read, in part, as follows: (vi)(A) * * * (B) Item 9A of Form 20–F, quantitative and place add ‘‘; and’’, add paragraph (J) to Authority: 15 U.S.C. 78a, et seq., unless qualitative disclosures of market risk. Item 14(b)(3)(i), and add Instructions 8, otherwise noted. 9, and 10 to Item 14 to read as follows: * * * * * 17. By amending Form 10 (referenced § 240.14a±101 Schedule 14A. Information in § 249.210) by revising Item 2 to read Item 14. Information With Respect to Foreign required in proxy statement. Registrants Other Than F–2 or F–3 as follows: Registrants * * * * * Note—The text of Form 10 does not, and this amendment will not, appear in the Code * * * * * Item 13. Financial and Other Information of Federal Regulations. (g)(1) * * * (a) Information required. * * * (g)(2) Item 9A of Form 20–F, quantitative (5) Item 305 of Regulation S–K, Form 10 and qualitative disclosures of market risk. quantitative and qualitative disclosures about General Form for Registration of Securities * * * * * market risk; and * * * * * Item 17. Information With Respect to Foreign * * * * * Item 2. Financial Information Companies Other Than F–2 or F–3 Instructions to Item 13. Companies * * * * * Furnish the information required by Items 301, 303, and 305 of Regulation S–K * * * * * 6. A registered investment company need not comply with items (a)(2), (a)(3), and (a)(5) (§§ 229.301, 229.303, and 229.305 of this (b)(4)(i) * * * chapter). (b)(4)(ii) Item 9A of Form 20–F, of this Item 13. quantitative and qualitative disclosures of * * * * * * * * * * market risk. 18. By amending Form 20–F Item 14. Mergers, Consolidations, (referenced in § 249.220f) by adding * * * * * Acquisitions and Similar Matters Item 9A to be inserted after Item 9 and PART 240ÐGENERAL RULES AND * * * * * before Item 10 in Part I to read as (b) Information about the registrant and the follows: REGULATIONS, SECURITIES other person. EXCHANGE ACT OF 1934 Note—The text of Form 20–F does not, and * * * * * this amendment will not, appear in the Code (2) Information with respect to S–2 or S– of Federal Regulations. 13. The authority citation for Part 240 3 registrants. continues to read in part as follows: (i) Information required to be furnished. Form 20–F Authority: 15 U.S.C. 77c, 77d, 77g, 77j, *** Registration Statement Pursuant to Section 77s, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, (B) * * * 12(b) or (g) of The Securities Exchange Act 78d, 78i, 78j, 78l, 78m, 78n, 78o, 78p, 78q, (3) * * * of 1934 or Annual Report Pursuant to 78s, 78w, 78x, 78ll(d), 79q, 79t, 80a–20, 80a– (viii) Item 305 of Regulation S–K (§ 229.305 Section 13 or 15(d) of The Securities 23, 80a–29, 80a–37, 80b–3, 80b–4 and 80b– of this chapter), quantitative and qualitative Exchange Act of 1934 or Transaction Report 11, unless otherwise noted. disclosures about market risk. Pursuant to Section 13 or 15(d) of The (ii) Incorporation of certain information by Securities Exchange Act of 1934 * * * * * reference. * * * * * 14. By amending § 240.14a–3 by * * * * * adding paragraph (b)(5)(iii) to read as (A) * * * Part I follows: (3) * * * * * * * * Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 599

Item 9A. Quantitative and Qualitative foreign currency exchange rates, commodity distinguish derivative financial instruments, Disclosures About Market Risk. prices, and other similar market rates or other financial instruments, and derivative (a) Quantitative information about market prices) over a selected time period with a commodity instruments entered into for risk. (1) To the extent material, registrants selected likelihood of occurrence; value at trading purposes from those instruments that shall provide quantitative disclosures about risk disclosures should be made on an are entered into for purposes other than market risk, as of the end of the latest fiscal aggregate basis for all market risk sensitive trading. year. Such disclosures should be provided instruments and for each category of market 3. In preparing disclosures under using any one of the following three risk exposure, such as interest rate risk, paragraph 9A(a), registrants may include disclosure alternatives at the election of the foreign currency exchange rate risk, other market risk sensitive instruments, registrant: commodity price risk, and other similar positions, and transactions that are not (i)(A)(1) Tabular presentation of terms and market risks, such as equity price risk; addressed in instruction 1. to paragraph information related to market risk sensitive (B) For each risk exposure category either: 9A(a). Such instruments, positions, and instruments; such information (e.g., expected (1) The average or range in the value at risk transactions might include commodity cash flows by maturity dates) should be numbers for the reported period; positions, derivative commodity instruments categorized according to risk exposure (2) The average or range in actual changes that are not reasonably possible to be settled category (e.g., interest rate risk, foreign in fair values, earnings, or cash flows of in cash or with another financial instrument, currency exchange rate risk, commodity price instruments occurring during the reporting cash flows from anticipated transactions, and risk, and other similar market risks, such as period; or operating cash flows from non-financial and equity price risk), and within the foreign (3) The percentage of time the actual non-commodity instruments (e.g., cash flows currency exchange rate risk category, by changes in fair values, earnings, or cash flows generated by manufacturing activities). functional currency (e.g., U.S. dollar, of market risk sensitive instruments exceeded Registrants choosing to include voluntarily Japanese yen). the reported value at risk amounts during the these instruments, positions, and cash flows (2) Within each of these risk exposure current reporting period; (The information in for purposes of paragraphs 9A(a)1(ii) and categories, instruments should be grouped this subparagraph (B) is not required for the 9A(a)1(iii) are required to state that they have based on common characteristics. At a first fiscal year end for which this rule is included such instruments, positions, and minimum, instruments should be effective) and cash flows. distinguished by the following (C) A description of the model assumptions 4. Under paragraph 9A(a)(1)(i): characteristics: and parameters necessary to an (A) The examples of terms and information (i) Fixed rate or variable rate assets or understanding of the disclosures required relating to market risk sensitive instruments liabilities; under subparagraphs (A) and (B) of this Item that should be disclosed include, but are not (ii) Long or short forwards or futures; 9A(a)(1)(iii). limited to, the instruments’ fair values, (iii) Written or purchased put or call (2) Registrants shall discuss material expected principal or transaction cash flows, options; limitations that may cause the information weighted average effective rates or prices, (iv) Receive fixed or receive variable required under paragraph (a)(1) of this item and other relevant market risk related interest rate swaps; and 9A not to reflect the overall market risk of the information; (v) The currency in which the instruments’ entity. This discussion shall include (B) Functional currency means functional cash flows are denominated. descriptions of: currency as defined by generally accepted (3) For each instrument in the table, (i) Each limitation; and accounting principles (see, e.g., FASB, expected cash flow information should be (ii) If applicable, the instruments’ features Statement of Financial Accounting presented separately for each of the next five that are not reflected fully within the selected Standards No. 52, ‘‘Foreign Currency years with the remaining expected cash flows quantitative market risk disclosure Translation’’, (‘‘FAS 52’’) Appendix E presented as an aggregate amount. alternative. (December 1981); Derivatives used to manage risks inherent in (3) Registrants shall present summarized (C) Model assumptions that should be anticipated transactions also should be information for the preceding fiscal year. described include, but are not limited to, disclosed separately; and Registrants also shall discuss the reasons for specification of the differing numbers (B) A description of assumptions necessary material changes in quantitative information reported in the table for various categories of to an understanding of the disclosures about market risk when compared to the instruments (e.g., principal cash flows for required under subparagraph (A) of this item information reported in the previous period. debt, notional amounts for swaps, and 9A(a)(1)(i) (see the Appendix to this Item for Information required by this paragraph (a)(3) contract amounts for options and futures) a suggested tabular format for presentation of of item 9A, however, is not required if and key prepayment and/or reinvestment this information), or disclosure is not required pursuant to assumptions relating to the timing of (ii)(A) Sensitivity analyses that express the paragraph (a)(1) of this item 9A for the reported cash flow amounts; and hypothetical loss in future earnings, fair current fiscal year. Information required by (D) Market risk sensitive instruments that values, or cash flows of market risk sensitive this paragraph (a)(3) of item 9A is not are exposed to rate or price changes in more instruments resulting from at least one required for the first fiscal year end in which than one market risk exposure category selected hypothetical change in interest rates, this item 9A is effective. should be presented within the tabular currency exchange rates, commodity prices, (4) Registrants may change methods of information under each of those risk and similar market rates or prices over a presenting quantitative information about exposure categories. selected time period. The magnitude of each market risk (e.g., changing from tabular 5. Under paragraph 9A(a)(1)(ii), model selected hypothetical change in rates or presentation to value at risk). However, if assumptions and parameters that should be prices may differ across risk exposures. such a change is made the registrants shall: described include, but are not limited to, Separate sensitivity analysis disclosures (i) Explain the reasons for the change; and how loss is defined by the model (e.g., loss should be made for each category of risk (ii) Provide summarized comparable in earnings, fair values, or cash flows), a exposure, i.e., interest rate risk, foreign information, under the new disclosure general description of the modeling currency exchange rate risk, commodity price method, for the year preceding the current technique (e.g., change in net present values risk, and other similar market risks, such as year. arising from parallel shifts in market rates or equity price risk; and Instructions to Paragraph 9A(a). prices and how optionality is addressed by (B) A description of the model assumptions 1. In preparing the disclosures under the model), the types of instruments covered and parameters necessary to an paragraph 9A(a), registrants are required to by the model (e.g., derivative financial understanding of the disclosures required include derivative financial instruments, instruments, other financial instruments, under subparagraph (A) of this item other financial instruments, and derivative derivative commodity instruments, and 9A(a)(1)(ii); or commodity instruments, as specified in the whether other instruments are included (iii)(A) Value at risk disclosures that General Instructions to Paragraphs 9A(a) and voluntarily, such as certain commodity express the potential loss in fair values, 9A(b). instruments and positions, cash flows from earnings, or cash flows from market 2. In preparing disclosures under anticipated transactions, and operating cash movements (e.g., changes in interest rates, paragraph 9A(a), registrants should flows from non-financial and non-commodity 600 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules instruments), and other relevant information 1. The disclosures required by this Standards No. 107, ‘‘Disclosures about Fair on the model’s parameters, (e.g., the paragraph 9A(b) relate to the market risk Value of Financial Instruments,’’ paragraph magnitudes of parallel shifts in market rates exposures inherent in derivative financial 3, (December 1991)), except for derivative or prices used, the method by which instruments, other financial instruments, and financial instruments, as defined above; discount rates are determined, and key derivative commodity instruments, as (C) Other financial instruments include, prepayment and/or reinvestment defined in the General Instructions to but are not limited to, trade accounts assumptions). Paragraphs 9A(a) and 9A(b). receivable, investments, loans, structured 6. Under paragraph 9A(a)(1)(iii), model 2. In preparing disclosures under notes, mortgage-backed securities, trade assumptions and parameters that should be paragraph 9A(b), the qualitative information accounts payable, indexed debt instruments, described include, but are not limited to, about market risk should be presented interest-only and principal-only obligations, how loss is defined by the model (e.g., loss separately for derivative financial deposits, and other debt obligations. in earnings, fair values, or cash flows), type instruments, other financial instruments, and However, for purposes of this release, trade of model used (e.g., variance/covariance, derivative commodity instruments that are accounts receivable and trade accounts historical simulation, Monte Carlo entered into for trading purposes and those payable should not be considered other simulation, and how optionality is addressed that are entered into for purposes other than financial instruments when their carrying by the model), the types of instruments trading. In addition, qualitative information amounts approximate fair value; and covered by the model (e.g., derivative about market risk should be presented (D) Derivative commodity instruments financial instruments, other financial separately for those instruments used to include, to the extent such instruments are instruments, derivative commodity manage risks inherent in anticipated not derivative financial instruments, instruments, and whether other instruments transactions. commodity futures, commodity forwards, are included voluntarily, such as certain 3. Primary market risk exposures, for the commodity swaps, commodity options, and commodity instruments and positions, cash purposes of this paragraph, mean: other commodity instruments with similar flows from anticipated transactions, and (A) The following categories of market risk: characteristics that are reasonably possible to operating cash flows from non-financial and interest rate risk, foreign currency exchange be settled in cash or with another financial non-commodity instruments), and other rate risk, commodity price risk, and other instrument. For purposes of paragraphs 9A(a) relevant information on model parameters, similar market rate or price risks (e.g., equity and 9A(b) and these general instructions, the (e.g., holding period, confidence interval, and prices); and term ‘‘reasonably possible’’ has the same the method used for aggregating value at risk (B) Within each of these categories, the meaning as defined by generally accepted amounts across market risk exposure particular markets that present the primary accounting principles (see, e.g., FASB, categories, such as by assuming perfect risk of loss to the registrant. For example, if Statement of Financial Accounting positive correlation, independence, or actual a registrant has a material exposure to foreign Standards No. 5, ‘‘Accounting for observed correlation). currency exchange rate risk and, within this Contingencies,’’ paragraph 3, (March 1975)). 7. Under paragraph 9A(a)(2), limitations category of market risk, is most vulnerable to 3. For purposes of paragraphs 9A(a) and that should be considered include, but are changes in dollar/yen, dollar/pound, and 9A(b), disclosure is not required for: not limited to: dollar/peso exchange rates, the registrant (A) Commodity positions; (A) The exclusion of certain market risk would disclose these exposures. Similarly, if (B) Derivative commodity instruments that sensitive instruments, positions, and a registrant has a material exposure to are not reasonably possible to be settled in transactions from the disclosures required interest rate risk and, within this category of cash or with another financial instrument; under paragraph 9A(a)(1) (e.g., derivative market risk, is most vulnerable to changes in (C) Cash flows from anticipated commodity instruments not reasonably short-term U.S. prime interest rates, it would transactions; and/or possible to be settled in cash or with another disclose this exposure. (D) Operating cash flows from non- financial instrument, commodity positions, 4. For purposes of disclosure under financial and non-commodity instruments. cash flows from anticipated transactions, and paragraph (b) of this item 9A, registrants 4. (A) For purposes of making a materiality operating cash flows from non-financial and should describe primary market risk assessment under paragraphs 9A(a) and non-commodity instruments, such as cash exposures that exist at the end of the current 9A(b), registrants should consider both: flows from manufacturing activities). Failure reporting period, and how those exposures (i) The materiality of the fair values of to include such instruments, positions, and are managed. derivative financial instruments, other transactions in preparing the disclosures General Instructions to Paragraphs 9A(a) financial instruments, and derivative under paragraph 9A(a)(1) may be a limitation and 9A(b). commodity instruments outstanding at the because the resulting information may not 1. The disclosure called for by paragraphs end of the current reporting period; and fully reflect the overall market risk of a 9A(a) and 9A(b) is intended to clarify the (ii) The materiality of the potential loss in registrant; and registrant’s exposure to market risks future earnings or fair values from reasonably (B) The ability of disclosures required associated with activities in derivative possible market movements. under paragraph 9A(a)(1) to reflect fully the financial instruments, other financial (B) If either (i) or (ii) of instruction 4. (A) market risk that may be inherent in instruments, and derivative commodity is material, then the disclosures under instruments with leverage, option, or instruments. paragraphs 9A(a) and 9A(b) are required. prepayment features (e.g., structured notes, 2. For purposes of paragraphs 9A(a) and (C) In determining the materiality of the collateralized mortgage obligations, leveraged 9A(b), derivative financial instruments, other fair values of market risk sensitive swaps, and swaps with embedded written financial instruments, and derivative instruments outstanding at the end of the options). commodity instruments (referred collectively current reporting period, registrants generally (b) Qualitative information about market as ‘‘market rate sensitive instruments’’ or should not net fair values, except to the risk. To the extent material, describe: ‘‘instruments’’) are defined as follows: extent allowed under generally accepted (1) The registrant’s primary market risk (A) Derivative financial instruments has accounting principles (see, e.g., FASB exposures; the same meaning as defined by generally Interpretation No. 39, ‘‘Offsetting of Amounts (2) How those exposures are managed (e.g., accepted accounting principles (see, e.g., Related to Certain Contracts’’ (March 1992)). a description of the objectives, general FASB, Statement of Financial Accounting For example, under this instruction, the fair strategies, and instruments, if any, used to Standards No. 119, ‘‘Disclosure about value of assets generally should not be netted manage those exposures); and Derivative Financial Instruments and Fair with the fair value of liabilities. In (3) Changes in either the registrant’s Value of Financial Instruments,’’ paragraphs determining the materiality of the potential primary market risk exposures or how those 5–7, (October 1994)), and includes futures, loss in future earnings or fair values from exposures are managed when compared to forwards, swaps, options, and other financial reasonably possible market movements, what was in effect during the most recent instruments with similar characteristics; registrants should consider both the reporting period and what is known or (B) Other financial instruments means all magnitude of past market movements, as well expected to be in effect in future reporting financial instruments as defined by generally as expectations about the magnitude of future periods. accepted accounting principles (see, e.g., market movements. In addition, in making Instructions to Paragraph 9A(b). FASB, Statement of Financial Accounting the determination under this instruction Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 601 about the materiality of the potential loss in Financial Accounting Standards No. 80, financial instruments and other future earnings, fair values, or cash flows, ‘‘Accounting for Futures Contracts,’’ financial instruments, which are registrants should consider, among other paragraph 9, (August 1984)). sensitive to changes in interest rates, things, potential losses that may arise from leverage, option, and/or multiplier features. Appendix to Item 9A—Tabular Disclosures including interest rate swaps and debt 5. For purposes of presenting quantitative The tables set forth below are illustrative obligations. For debt obligations, the and qualitative information about market of the format that might be used when a table presents principal cash flows and risk, registrants generally should provide the registrant elects to present the information related weighted average interest rates required information in one location. required by paragraph (a)(1)(i)(A) of Item 9A by expected maturity dates. Weighted However, alternative presentation, such as regarding terms and information about inclusion of all or part of the information in derivative financial instruments, other average variable rates are based on the footnotes to the financial statements or in financial instruments, and derivative implied forward rates in the yield curve Management’s Discussion and Analysis, may commodity instruments. These examples are at the reporting date. For interest rate be used if such presentation would be more for illustrative purposes only. Registrants are swaps, the table presents notional meaningful to investors. not required to display the information in the amounts and weighted average interest specific manner illustrated below. 6. For purposes of the instructions to rates by expected (contractual) maturity paragraphs 9A(a) and 9A(b), ‘‘trading Alternative methods of display are purposes’’ has the same meaning as defined permissible as long as the disclosure dates. Notional amounts are used to by generally accepted accounting principles requirements of the section are satisfied. calculate the contractual payments to be (see, e.g., FASB, Statement of Financial Furthermore, these examples were designed exchanged under the contract. The Accounting Standards No. 119, ‘‘Disclosure primarily to illustrate possible formats for information is presented in US dollar about Derivative Financial Instruments and presentation of the information required by equivalents, which is the Company’s the proposed section and do not purport to Fair Value of Financial Instruments,’’ reporting currency. The instrument’s paragraph 9a, (October 1994)). In addition, illustrate the broad range of derivative ‘‘anticipated transactions’’ means financial instruments, other financial actual cash flows are denominated in transactions (other than transactions instruments, and derivative commodity both US dollar ($US) and German involving existing assets or liabilities or instruments utilized by registrants. deutschmarks (DMs), as indicated in transactions necessitated by existing firm Interest Rate Sensitivity parentheses. commitments) an enterprise expects, but is not obligated, to carry out in the normal The table below provides information course of business (e.g., FASB, Statement of about the Company’s derivative

Expected maturity date December 31, 19×1 Total Fair × × × × × There- Value 19 2 19 3 19 4 19 5 19 6 after

(In millions)

Liabilities: Long-term Debt: Fixed Rate ($US) ...... $XXX $XXX $XXX $XXX $XXX $XXX $XXX $XXX Average interest rate ...... X.X% X.X% X.X% X.X% X.X% X.X% X.X% ...... Fixed Rate (DMs) ...... XXX XXX XXX XXX XXX XXX XXX XXX Average interest rate ...... X.X% X.X% X.X% X.X% X.X% X.X% X.X% ...... Variable Rate ($US) ...... XXX XXX XXX XXX XXX XXX XXX XXX Average interest rate ...... X.X% X.X% X.X% X.X% X.X% X.X% X.X% ......

Expected maturity date Total Fair value × × × × × There- 19 2 19 3 19 4 19 5 19 6 after

(In millions)

Interest Rate Derivatives: Interest Rate Swaps Variable to Fixed ($US) ...... $XXX $XXX $XXX $XXX $XXX $XXX $XXX $XXX Average pay rate ...... X.X% X.X% X.X% X.X% X.X% X.X% X.X% ...... Average receive rate ...... X.X% X.X% X.X% X.X% X.X% X.X% X.X% ...... Fixed to Variable ($US) ...... XXX XXX XXX XXX XXX XXX XXX XXX Average pay rate ...... X.X% X.X% X.X% X.X% X.X% X.X% X.X% ...... Average receive rate ...... X.X% X.X% X.X% X.X% X.X% X.X% X.X% ......

Exchange Rate Sensitivity equivalents.1 The table summarizes denominated debt obligations, and The table below provides information information on instruments and firmly committed DM sales transactions. about the Company’s derivative transactions that are sensitive to foreign For debt obligations, the table presents financial instruments, other financial currency exchange rates, including principal cash flows and related instruments, and firmly committed sales foreign currency forward exchange weighted average interest rates by transactions by functional currency and agreements, deutschmark (DM)- expected maturity dates. For firmly presents such information in U.S. dollar committed DM-sales transactions, sales 1 The information is presented in U.S. dollars amounts are presented by the expected because that is the registrant’s reporting currency. transaction date, which are not expected 602 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules to exceed two years. For foreign and weighted average exchange rates by used to calculate the contractual currency forward exchange agreements, expected (contractual) maturity dates. payments to be exchanged under the the table presents the notional amounts These notional amounts generally are contract.

Expected maturity date December 31, 19×1 Total Fair value × × × × × There- 19 2 19 3 19 4 19 5 19 6 after

(US$ Equivalent in Millions)

On-Balance Sheet Financial Instruments: $US Functional Currency 2 Liabilities Long-Term Debt (DM) ...... $XXX $XXX $XXX $XXX $XXX $XXX $XXX $XXX Average U.S. dollar /DM Exchange Rate ...... X.X X.X X.X X.X X.X X.X X.X ...... 2 Similar tabular information would be provided for other functional currencies.

Expected maturity or transaction date There- Total Fair value 19×2 19×3 19×4 19×5 19×6 after

(US$ Equivalent in millions)

Anticipated Transactions and Related Deriva- tives 3 $US Functional Currency: Firmly committed transactions: Sales Contracts (DM) ...... $XXX $XXX ...... $XXX $XXX Forward Exchange Agreements (Re- ceive $US/Pay DM): Contract Amount ...... XXX XXX ...... $XXX $XXX Average Exchange Rate ...... X.X X.X ...... X.X ...... 3 Pursuant to Instruction 3 to proposed Item 9A of Form 20±F, registrants may include cash flows from anticipated transactions and operating cash flows resulting from non-financial and non-commodity instruments.

Commodity Price Sensitivity the table presents the carrying amount expected maturity dates, the latest of The table below provides information and fair value at December 31, 19x1. For which occurs within one year from the about the Company’s corn inventory the futures contracts the table presents reporting date. Contract amounts are and futures contracts that are sensitive the notional amounts in bushels, the used to calculate the contractual to changes in commodity prices, weighted average contract prices, and payments and quantity of corn to be specifically corn prices. For inventory, the total dollar contract amount by exchanged under the futures contracts.

Carry- December 31, 19×1 ing Fair Value amount

On Balance Sheet Commodity Position and Related Derivatives: (In millions)

Corn Inventory ...... $XXX . $XXX 4 4 Pursuant to proposed Instruction 3 to proposed Item 9A of Form 20±F, registrants may include information on commodity positions, such as corn inventory.

Expected maturity Fair value 1992

Related Derivatives: Futures Contracts (Short): Contract Volumes (100,000 bushels) ...... XXX ...... Weighted Average Price (Per 100,000 bushels) ...... $X.XX Contract Amount ($US in millions) ...... $XXX $XXX

* * * * * I of this form’’ in paragraphs 1 and 2 of Note—The text of Form 10–Q does not, and 19. By amending Form 10–Q General Instruction F, adding paragraph this amendment will not, appear in the Code of Federal Regulations. (referenced in § 249.308a) by removing 2.c. to General Instruction H and Item 3 references to ‘‘Items 1 and 2 of Part I of to Part I to read as follows: Form 10–Q this form’’ and adding in their place references to ‘‘Items 1, 2, and 3 of Part Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 603

Quarterly Report Pursuant to Section 13 or Item 3. Quantitative and Qualitative Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Disclosures About Market Risk 15(d) of the Securities Exchange Act of 1934 or Transition Report Pursuant to Section 13 or Transition Report Pursuant to Section 13 If there has been a material change in the or 15(d) of the Securities Exchange Act of or 15(d) of the Securities Exchange Act of information required by Item 305 of 1934 1934 Regulation S–K (§ 229.305 of this chapter) * * * * * from the end of the preceding fiscal year to * * * * * General Instructions the date of the most recent interim balance Part II sheet provided, furnish the information * * * * * * * * * * required by Item 305 of Regulation S–K. Item 7A. Quantitative and Qualitative H. Omission of Information by Certain * * * * * Wholly-Owned Subsidiaries Disclosures About Market Risk. 20. By amending Form 10–K * * * * * Furnish the information required by Item (referenced in § 249.310) by adding Item 305 of Regulation S–K (§ 229.305 of this 2. * * * 7A to be inserted after Item 7 and before chapter). c. Such registrants may omit the Item 8 in Part II to read as follows: information called for by Item 3 of Part I, * * * * * Dated: December 28, 1995. Quantitative and Qualitative Disclosures Note—The text of Form 10–K does not, and About Market Risk. this amendment will not, appear in the Code By the Commission. Jonathan G. Katz, * * * * * of Federal Regulations. Secretary. Form 10–K Part I—Financial Information [FR Doc. 96–130 Filed 1–5–96; 8:45 am] * * * * * BILLING CODE 8010±01±P federal register January 8,1996 Monday Diabetes; ProposedRule Qualifications ofDrivers,Visionand 49 CFRPart391 Federal HighwayAdministration Transportation Department of Part III 605 606 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules

DEPARTMENT OF TRANSPORTATION issue a final determination and rule on least 20/40 acuity, corrected or this matter at any time after the close of uncorrected.1 Federal Highway Administration the comment period. The FHWA published a subsequent FOR FURTHER INFORMATION CONTACT: The notice, 57 FR 23370, on June 3, 1992, 49 CFR Part 391 FHWA has established a special announcing the receipt of applications [FHWA Docket No. MC±96±2] telephone number to receive inquiries by drivers for waiver of the FHWA’s vision requirements and seeking RIN 2125±AD73 regarding this action. The number is 1– 800–832–5660. Office hours are from comments on its intent to waive its vision requirements for drivers who met Qualification of Drivers; Vision and 7:45 a.m. to 4:15 p.m., e.t., Monday certain conditions. The notice explained Diabetes; Limited Exemptions through Friday, except Federal holidays. that the proposed waiver program SUPPLEMENTARY INFORMATION: Section would enable the FHWA to conduct a AGENCY: Federal Highway 206(f) of the Motor Carrier Safety Act of study comparing a group of experienced Administration (FHWA), DOT. 1984 (MCSA), Pub. L. No. 98–554, 98 drivers with a visual deficit in one eye ACTION: Notice of proposed rulemaking Stat. 2835 (codified at 49 U.S.C. with a control group of experienced (NPRM); request for comments. 31136(e), formerly 49 U.S.C. App. drivers who meet the Federal vision 2505(f)) allows the Secretary of SUMMARY: The FHWA announces a requirements. The FHWA believed that Transportation to issue waivers from the proposal to allow those drivers the study would provide the empirical Federal Motor Carrier Safety currently holding valid waivers from data that a previous study did not. Regulations only after a determination both the vision and diabetes standards In its Notice of Final Disposition, 57 that such waivers are not contrary to the contained in the Federal Motor Carrier FR 31458, published on July 16, 1992, public interest and are consistent with Safety Regulations (FMCSRs) to the FHWA instituted the waiver the safe operation of CMVs. Historically, continue to operate in interstate program, making temporary waivers the FHWA has issued limited waivers commerce after March 31, 1996. This available to drivers who met the and does not intend to enter into any action is directed solely at those drivers announced conditions. The FHWA large scale program of exemptions. The who have been granted temporary determined that the waiver is not safety performance data collected under waivers to participate in either the contrary to the public interest. The the vision and diabetes waiver programs Federal vision waiver study, who program is consistent with the national would be used as the basis for this numbered 2240, or in the Federal policy, as expressed in the determination; however, separate diabetes waiver study, who number 119 Rehabilitation Act of 1973 and the research proceedings would form the as of November 1, 1995. The FHWA Americans with Disabilities Act, to basis for any future adjustments, if believes that allowing this special group facilitate the employment of qualified warranted, to the current vision and of drivers to continue to drive after individuals with disabilities. Moreover, diabetes standards. The FHWA has March 31, 1996, is consistent with the the FHWA found that the waiver decided on a 30 day comment period in public interest and safe operation of program was consistent with the safe order to give adequate notice to waived commercial motor vehicles (CMV). This operation of CMVs because the drivers of their status at the conclusion action is necessary because the waiver program’s requirements would of the waiver program on March 31, program termination date of March 31, effectively screen out unsafe drivers. 1996. Prior notices on the waiver 1996, has been established, and without These safeguards required waiver program have established the issues this action, the drivers will no longer be applicants to be otherwise qualified facing the FHWA in deciding the qualified to operate in interstate under 49 CFR Part 391, and hold a valid disposition of these drivers; therefore, commerce after that date. The FHWA commercial driver’s license to operate a these issues are well known to potential proposes to allow these drivers to CMV issued after April 1, 1990. The commenters on this notice. See 59 FR continue operations, subject to certain applicant must also have had three 50887 (October 6, 1994) and 59 FR operating conditions. The proposal also years’ recent experience driving a CMV 59386 (November 17, 1994). includes a technical amendment to without (1) license suspension or relocate an existing provision so that all Vision Waiver Program Background revocation; (2) involvement in a limited exemptions from driver reportable accident in which the On February 28, 1992, the FHWA applicant received a citation for a qualification standards can be found in published a notice of proposed the same subpart. moving violation; (3) conviction for rulemaking (NPRM), 57 FR 6793, driving a CMV while intoxicated, DATES: Comments must be received on requesting comments on the need, if leaving the scene of an accident or before February 7, 1996. any, to amend its driver physical involving a CMV, commission of a ADDRESSES: Submit written, signed qualification requirements relating to felony or more than one serious traffic comments to FHWA Docket No. MC– vision. On March 25, 1992, the FHWA violation involving a CMV; or (4) more 96–2, Room 4232, HCC–10, Office of the published a notice of intent to issue than two convictions for any other Chief Counsel, Federal Highway waivers from the vision requirement, 57 moving violation in a CMV. Finally, the Administration, 400 Seventh Street, FR 10295. The notice indicated that applicant had to present proof from an SW., Washington, DC 20590. All applications would be processed as comments received will be available for quickly as possible and waivers would 1 The current Federal vision standard for CMV examination at the above address from be issued for a period of three years or drivers requires: distant visual acuity of at least 20/ 8:30 a.m. to 3:30 p.m., e.t., Monday until the current rulemaking addressing 40 (Snellen) in each eye without corrective lenses or visual acuity separately corrected to 20/40 through Friday, except Federal holidays. the Federal vision requirement is (Snellen) or better with corrective lenses, distant Those desiring notification of receipt of completed, whichever occurred first. binocular acuity of at least 20/40 (Snellen) in both comments must include a self-addressed The notice imposed certain conditions eyes with or without corrective lenses, field of envelope. Comments received after the and reporting requirements on vision of at least 70 degrees in the horizontal meridian in each eye, and the ability to recognize comment closing date will be filed in applicants, among them that applicants the colors of traffic signals and devices showing the docket and will be considered to the for a waiver submit medical certification standard red, green, and amber. 49 CFR extent practicable. The FHWA may that the vision in their better eye is at 391.41(b)(10). Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 607 optometrist or ophthalmologist reduce the safety risks to the waived description of the diabetes waiver certifying that the applicant’s visual drivers and highway users. This task program, see 58 FR 40690, July 29, 1993. deficiency has not worsened since his or was accomplished by separate mailings The August 2, 1994, court decision in her last examination, that vision in one to vision waiver drivers on February 8, Advocates called into question the eye is at least 20/40 acuity, corrected or 1995. The notice also announced that FHWA’s ability to issue waivers to uncorrected, and that the applicant is the FHWA would convene a public insulin-treated diabetic drivers because able to perform the driving tasks meeting regarding its research plans of the similar approach used to pre- required to operate a CMV. with respect to defining the appropriate qualify drivers for participation in the In addition, the applicant had to vision standard. diabetes waiver program. comply with the following Accordingly, the FHWA notified the requirements: (1) report all citations for Diabetes Waiver Program Background diabetes waiver drivers, in separate moving violations involving a CMV; (2) The FHWA has considered various mailings on March 28, 1995, of the report the disposition of the charge; (3) amendments to its diabetes requirement court’s decision and changes to the report any accident involvement since 1977. See 55 FR 41028 (October 5, Vision and Diabetes Waiver Programs whatsoever while operating a CMV; (4) 1990) (notice of proposed rulemaking) that allowed both programs to continue submit documentation of an annual and 52 FR 45204 (November 25, 1987) until March 31, 1996. The FHWA examination by an ophthalmologist or (advance notice of proposed established stricter performance optometrist; and (5) submit reports of rulemaking) with FHWA docket number conditions for all participants, and vehicle miles traveled monthly in a MC–87–17. Please refer to these notices enhanced the FHWA’s monitoring of the CMV. for a complete background discussion of performance of the waived drivers in order to ensure compliance with the Court Decision the FHWA’s efforts in this area. Copies can be found in the docket. statutory test as construed by the court. On August 2, 1994, the U.S. Court of The FHWA published in the Federal Proposed Action Appeals for the D.C. Circuit found that Register a Notice of Intent to Initiate a the agency’s ‘‘determination that the Waiver Program for certain insulin- The FHWA now proposes that the waived drivers in the vision and waiver program will not adversely affect using diabetic drivers of CMVs from the diabetes programs should be allowed to the safe operation of CMVs is devoid of absolute prohibition contained in the continue driving in interstate commerce empirical support in the record’’ and FMCSRs. See 57 FR 48011 (October 21, after March 31, 1996. The underlying that ‘‘the FHWA has failed to meet the 1992). The intent of the proposed basis for this proposal is that the FHWA exacting requirements of section 2505(f) waiver program was to collect data on has significant data to show that the (now 49 U.S.C. 31136(e)).’’ Advocates the driving experience of a group of continued operation of both waived for Highway and Auto Safety v. FHWA, insulin-using drivers and use that 28 F.3d 1288, 1294. Consequently, the groups of drivers, who total 2359 as of information to support amending, if Court concluded that the FHWA’s November 1, 1995, would be consistent warranted, the current diabetes adoption of the waiver program was with the safe operation of CMVs. Prior requirement.2 contrary to law, and vacated and to being admitted into the study the On July 29, 1993, the FHWA remanded the rule to the agency. waiver applicants had to demonstrate a On October 6, 1994, the FHWA published in the Federal Register a three-year period of accident-free published a Notice of Determination, Notice of Final Disposition allowing driving performance, coupled with an Request for comments, 59 FR 50887, certain insulin-using diabetic drivers to absence of serious traffic violations. extending the validity of the vision operate a CMV in interstate commerce Since the program began, the data have waivers for a thirty-day period. The for a 3-year period. Stringent conditions shown that the driving performance of notice also proposed to allow the waiver were established to satisfy the mandate this group of waived drivers was and program to continue until its original that this action be consistent with the continues to be better than the driving March 31, 1996, termination date based safe operation of CMVs. These performance of all CMV drivers on the additional empirical evidence conditions included at least three years collectively, based on data obtained presented in the notice. On the same of experience driving a CMV while the from the General Estimates Service day, an emergency motion was filed in individual had been using insulin to (GES) as discussed more fully below.3 the D.C. Circuit requesting that the court control his or her diabetes, a good Moreover, each driver in the waiver issue and enforce the mandate in driving record (as in the vision waiver programs has been closely monitored, in Advocates, thereby halting the waiver condition) and certification from an many cases for three years or more. program. The court issued its mandate endocrinologist that the diabetic Coupled with their 3-year good driving on October 21, 1994, and on October 24, condition will not adversely impact on record preceding the waivers, the 1994, the court denied the Advocates’ the applicant’s ability to operate a CMV. drivers have individually merited emergency motion. In addition, participants were required partial exemption from §§ 391.41(b)(10) On November 17, 1994, the FHWA to monitor their blood glucose levels or 391.41(b)(3). published a Notice of Final using portable glucose monitoring Consequently, the FHWA proposes to Determination (59 FR 59386) that devices and maintain accurate logs, amend part 391 of the FMCSRs to grant continued the vision waiver program submit monthly driving activity reports grandfather rights to all drivers holding through March 31, 1996. The FHWA’s to the FHWA, notify the FHWA of any a valid Federal vision or diabetes waiver decision was based, in part, on data involvement in an accident and undergo on March 31, 1996. By proposing the collected on the group of waived drivers biannual examinations by an grandfather provision, the FHWA indicating that they had performed and endocrinologist. Approximately 140 intends to allow only those drivers who continued to perform more safely than drivers were accepted into the diabetes have been granted temporary waivers to drivers in the general population of waiver program. For a complete commercial drivers. The notice 3 The GES is a national survey conducted by the 2 announced that the FHWA would The current Federal diabetes standard for CMV National Highway Traffic Safety Administration drivers requires no established medical history or and was selected for use as the best measure of the develop and impose more stringent clinical diagnosis of diabetes mellitus currently prevailing national norm relative to large truck performance conditions to further requiring insulin for control. 49 CFR 391.41(b)(3). accidents. 608 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules participate in the Federal vision and to carry a source of rapidly absorbable confidence intervals would play no role diabetes waiver programs, numbering glucose and continue to monitor their in the decision process. This was done 2359 as of November 1, 1995, to blood glucose using a portable glucose because the small sample of drivers who continue to operate in interstate monitoring device equipped with a received diabetes waivers would lead to commerce beyond March 31, 1996, computerized memory one hour prior to wide confidence intervals. Rather, in the subject to certain operating conditions. and approximately every four hours event that the accident rate of the This action would provide relief to while driving. Upon request, the driver diabetes waiver group would become these drivers who otherwise would not would submit his or her blood glucose larger than the national rate, notification be permitted to operate a CMV in logs to the endocrinologist and/or the would be made that there could be a interstate commerce. These grandfather medical examiner or when otherwise threat to public safety. In this case, the provisions would also be conditional in directed by an authorized agent of the national rate is treated as a constant order to further reduce any possible risk FHWA. A copy of the endocrinologist’s since it is frequently expressed as an associated with those drivers. In report would be submitted to the official rate without a confidence addition to the conditions regarding medical examiner at the time of the interval. medical requirements discussed below, annual physical qualification Additional monitoring and more the FHWA proposes to continue examination under part 391 of the stringent conditions were implemented monitoring the performance of these FMCSRs. in early 1995 in response to the drivers through periodic checks. The FHWA proposes to require this Advocates decision and the concerns group of drivers to carry a medical raised by the safety community. In Medical Requirements for Operating examiners certificate stating: ‘‘Medically addition to the group assessment, the Under This Grandfather Provision qualified by operation of 49 CFR waivered drivers were now subject to a The FHWA recognizes that any 391.64.’’ Drivers who do not provide a day-by-day individual assessment person’s medical or physical condition copy of the required information from relative to program compliance, may deteriorate in a short period of the ophthalmologist/optometrist or the violations and accidents. Drivers in time. The FHWA proposes to require an endocrinologist to the medical examiner violation of program conditions were annual physical examination pursuant at the time of their annual physical identified and removed if warranted; to § 391.43, instead of every 2 years as qualification examinations cannot be thereby identifying, in a timely fashion, is required of other drivers, as an extra recertified to continue driving a CMV in aspects of the program that could precaution to ensure the continued safe interstate commerce under this compromise public safety.4 Therefore in operation of these drivers. Under this proposed grandfather provision. both cases, data presented below will provision, these drivers, as all other Analysis represent drivers who are still in the interstate drivers, must be otherwise program as of this notice. physically qualified pursuant to The FHWA’s proposed action is § 391.41 of the FMCSRs. supported by the findings in an Drivers With Vision Waivers In addition, the FHWA proposes that assessment prepared for the FHWA to The FHWA examined the vision vision impaired drivers who would be determine the risk associated with the waiver data in terms of how the waiver grandfathered as a result of this action exposure to the public that is group performed in relation to the be required to obtain an annual vision represented by allowing waivered national population of large truck examination by an ophthalmologist or drivers to continue driving after March drivers and the future risk of these optometrist indicating that they have 31, 1996. A copy of this assessment is drivers from their behavior across time. been examined within the past two contained in the docket for public An examination of the cumulative months and that the vision in the better inspection. accident rates of the vision waivered eye is at least 20/40 acuity, corrected or Since the inception of the waiver drivers has shown a steady decline, and uncorrected. This information would be programs, drivers with waivers have by June 1995, the cumulative accident submitted to the medical examiner at been monitored continuously. The rate (1.63) was significantly lower than the time of the individual’s annual monitoring has involved comparing the the most recent national rate (2.422). physical qualification examination accident rates of the waivered drivers to An assessment of the trend in under part 391 of the FMCSRs. rates of a reference group, GES, that accident rates for this group was Accordingly, the FHWA proposes to represent the safety level for drivers of performed since the future driving amend part 391 to incorporate these large trucks (10,000 lbs. or larger) in the behavior of this group is important to conditions. United States. The overall accident rates the disposition of the program. Findings Similarly, diabetic drivers proposed of the waivered group represent the from the evaluation of accident data to be grandfathered as a result of this cumulative number of accidents for occurring in six-month periods indicate proposal would be required to obtain an drivers still in the program at the time that there is a decline in the total annual examination by a board of the report. To determine if the certified/eligible endocrinologist who waivered drivers in the vision program 4 Vision: At the end of October, 1995, 2240 must certify that the driver (1) has been posed an excessive threat to public drivers remained in the vision waiver program. A examined within the past two months; safety, the monitoring process used the total of 317 drivers had their waivers revoked. Two hundred and thirty one were revoked for failure to (2) is free of insulin reactions; (3) has 90 percent confidence intervals submit monthly mileage reports. Twelve were the ability and has demonstrated associated with each cumulative revoked because of convictions for serious traffic or willingness to properly monitor and accident rate and if the lower limit of disqualifying offenses. Sixty-five were revoked for manage his/her diabetes; and (4) does that confidence interval did not exceed failure to submit a medical exam. Seven waivers were canceled for medical reasons. Diabetes: At the not have a diabetic condition that would the national accident rate, the drivers in end of October, 1995, 119 drivers remained in the adversely affect his or her ability to the program were considered not to be diabetes waiver program. A total of seven drivers operate a CMV. One is free of insulin a threat to public safety. had their waivers revoked. Three were revoked for reactions if that individual has To determine if the waivered drivers failure to submit monthly mileage reports. One driver had his waiver revoked because of a experienced less than one documented, in the diabetes program posed an disqualifying offense. Three were revoked for symptomatic hypoglycemic reaction per excessive threat to public safety, it was failing to submit a medical exam. Nine waivers month. These drivers would be required decided that sampling error and were canceled for medical reasons. Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 609 accident rates across the periods. This relation to the national accident rate for reasonable to conclude that these significant negative trend suggests that large trucks. As previously mentioned, drivers are not a high risk group. these drivers are becoming increasingly the national rate is treated as a constant Notwithstanding the good driving careful in the operation of CMVs. and any time the accident rate of the performance of these drivers, the FHWA Some accidents that are the fault of waivered group is larger than the proposes to require the continued these drivers can be clearly identified by national rate, notification is made to the monitoring of the physical conditions virtue of an associated moving violation FHWA that there could be a threat to that have caused these drivers to be issued to a waivered driver. All public safety. From September 1993 to unqualified pursuant to § 391.41(b)(10) waivered drivers are required to report May 1995, 11 accidents were reported and § 391.41(b)(3) of the FMCSRs. any accident involvement whatsoever and, during this same period, waivered Therefore, the FHWA is requiring while operating a CMV and all accident drivers reported a total of 3.83 million annual medical examinations to information is verified through each vehicle miles traveled (VMT). The evaluate the disqualifying conditions in driver’s State motor vehicle record accident rate of the waivered drivers for addition to the annual physical (MVR). Accidents associated with this period is 2.872 accidents per qualification examinations pursuant to moving violations were examined for million VMT. This is larger than the part 391 of the FMCSRs. six-month periods between July 1992 1993 national rate, 2.390 accidents per Notice of Determination and June 1995. The accident rates million VMT. The property damage only decreased across time with the accident rate for the waivered drivers The FHWA believes that its proposed exception of the period between January (2.089) is also larger than the actions in this document are consistent 1994 and June 1994. One explanation comparable national rate (1.782) as is with the public interest and consistent for this anomaly could be the severe the case for the fatal accidents (.261 for with the safe operation of commercial motor vehicles. Based on the winter weather that occurred in that waiver group versus .027 for the performance data gathered to date and period. The negative trend for accidents national rate). associated with moving violations was the risk analysis performed on this data, Because of the warning systems, these the FHWA proposes that the drivers not as pronounced as the negative trend accidents were analyzed on an for total accidents for the waivered who currently hold waivers from the individual basis before decisions were Federal vision and diabetes group. made to continue the program. Of the This evaluation of the performance requirements should be allowed to eleven accidents reported, only one was data and assessment of risk indicates continue to operate CMVs in interstate shown to be the fault of a driver in the that the drivers who received vision commerce after March 31, 1996. The program. Although this driver was not waivers and are presently in the statistics that have been gathered from initially charged in this accident, the program will present no additional risk these groups of waived drivers indicate if they are allowed to continue to drive accident did involve a fatality and the that these drivers have performed and after March 1996. This group of drivers waivered driver was subsequently continue to perform more safely than had accident rates initially (July 1992 to charged and convicted of involuntary those drivers in the general population June 1993) that were comparable to the manslaughter. Consistent with the of commercial drivers. In addition to general population of large truck conditions, this driver’s waiver has been their good driving performance, the drivers. Following that period, their revoked and the driver has been continued monitoring of their physical accident rates were consistently lower dropped from the program. condition and safety performance will than the national rate. That In none of the other ten accidents was further ensure the continued safe performance, coupled with a three-year the waivered driver found to be at fault. operation of these CMV drivers. The period of safe driving performance prior Most involved only incidental contact performance data collected under the to being admitted into the program, with another vehicle. In fact, only three vision and diabetes waiver programs suggests that this group of drivers of the ten accidents would have been would be used as the basis for this exhibits behavior which presents no reportable or recordable under proposal; however, separate research additional risk to the public. applicable regulations due to injury or proceedings would form the basis for With respect to future risk to the damage. These three, plus the one any future adjustments, if warranted, to public, the data show a decreasing trend involving a fatality, are the only the current vision and diabetes in total accident rates over equal time accidents which are actually standards. periods across driver participation in comparable to the national data. Additionally, the proposal to permit the waiver program. Accidents Accidents are not included in the these grandfathered drivers to continue associated with a moving violation also national data unless there is a police to work in their chosen field of show a decreasing trend, though not as report and one of the involved vehicles occupation is consistent with the public pronounced as total accidents. This, is towed from the accident scene. This interest policy of employing persons combined with accident rates that are is not the case for the waiver programs with disabilities, which is evidenced in lower than the national rate, shows that where all accidents are included, both the Rehabilitation Act of 1973, these drivers will be less of a threat to regardless of how minor they are. If the Pub. L. 93–112, 87 Stat. 355, as public safety than the general same criteria were to be applied to the amended, and the Americans With population of CMV drivers. Moreover, waivered group, then only three of the Disabilities Act of 1990, Pub. L. 101– each driver’s performance was eleven accidents would be comparable 336, 104 Stat. 327, as amended. individually assessed to the extent that to the national data and the resulting Therefore, the FHWA proposes to such driver met the requirements of the accident rate for the drivers with amend part 391 of the FMCSRs to strengthened conditions and closer waivers for diabetes would be .783 per incorporate these grandfather provisions monitoring in effect since February million VMT. This rate is considerably for these groups of drivers. 1995. below the national rate of 2.390. Based on this performance data and the Technical Amendment Drivers With Waivers for Diabetes demonstrated three-year period of safe The FHWA is also proposing to Overall monitoring of this group is driving by this group prior to being relocate the provision in Part 391 performed on a quarterly basis in admitted into the waiver program, it is providing limited exemptions for intra- 610 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules city zone drivers. The current provision, State law or regulation. This proposal vehicle in a municipality or exempt required under the Motor Carrier Act of would not limit the policymaking intracity zone thereof throughout the 1988 (49 U.S.C. 31136(f)), is codified as discretion of the States. Therefore, the one-year period ending November 18, paragraph (d) of 49 CFR 391.2, General FHWA has determined that this 1988; Exemptions. This action would proposal does not have sufficient (b) Meets all the other requirements of redesignate the provision, without any federalism implications to warrant the this section; substantive change, as § 391.62, where it preparation of a separate Federalism (c) Operates wholly within the is more properly included in subpart G, Assessment. exempt intracity zone (as defined in Limited Exemptions. § 390.5); Executive Order 12372 (d) Does not operate a vehicle used in Executive Order 12866 (Regulatory (Intergovernmental Review) the transportation of hazardous Planning and Review) and DOT Catalog of Federal Domestic materials in a quantity requiring Regulatory Policies and Procedures Assistance Program Number 20.217, placarding under regulations issued by The FHWA has determined that the Motor Carrier Safety. The regulations the Secretary under 49 U.S.C. chapter proposed action, if implemented, would implementing Executive Order 12372 51; and not be a significant regulatory action regarding intergovernmental (e)(1) Was not yet 21 years of age on under Executive Order 12866 or under consultation on Federal programs and July 1, 1988; or the regulatory policies and procedures activities apply to this program. (2) Has a medical or physical of the DOT. It is anticipated that the condition which: Paperwork Reduction Act economic impact of this proposed rule (i) Would have prevented such person would be minimal because of its limited This program does not contain a from operating a commercial motor application and the small number of collection of information requirement vehicle under the Federal Motor Carrier affected drivers. Moreover, the action for purposes of the Paperwork Safety Regulations contained in this proposed herein would not have any Reduction Act of 1980, 44 U.S.C. 3501– subchapter; permanent effect on any existing safety 3520. (ii) Existed on July 1, 1988, or at the time of the first required physical standard. It would merely continue the Regulation Identification Number status quo by grandfathering some 2,300 examination after that date; and drivers who have been operating safely A regulation identification number (iii) The examining physician has for substantial periods of time. (RIN) is assigned to each regulatory determined has not substantially Therefore, a full regulatory evaluation is action listed in the Unified Agenda of worsened since July 1, 1988, or at the not required. Federal Regulations. The Regulatory time of the first required physical Information Service Center publishes examination after that date. Regulatory Flexibility Act the Unified Agenda in April and 2. A new § 391.64 is added to read as In compliance with the Regulatory October of each year. The RIN contained follows: Flexibility Act, 5 U.S.C. 601–612, the in the heading of this document can be § 391.64 Grandfathering for certain drivers FHWA has evaluated the effects of this used to cross reference this action with the Unified Agenda. participating in vision and diabetes waiver proposal on small entities. The FHWA studies. believes that this proposed action would List of Subjects in 49 CFR Part 391 (a) The provisions of § 391.41(b)(3) do not have a significant economic impact Driver qualifications, Highways and not apply to a driver who was a on a substantial number of small entities roads, Highway safety, Motor carriers, participant in good standing on March because this proposal is directed solely Motor vehicle safety. 31, 1996, in a study concerning the at a limited number and narrowly Issued on: December 21, 1995. operation of commercial motor vehicles defined population of CMV drivers by insulin-controlled diabetic drivers, Rodney E. Slater, operating in interstate commerce. This provided: proposal would not cause a major Federal Highway Administrator. (1) The driver is physically examined increase in costs or prices and, In consideration of the foregoing, the every year, including an examination by therefore, would not have a significant FHWA proposes to amend 49 CFR, a board-certified/eligible effect on the nation’s economy. The subchapter B, chapter III, part 391 as set endocrinologist attesting to the fact the FHWA intends to further evaluate the forth below: driver is: economic consequences of this proposal (i) Otherwise qualified under on small entities in light of the PART 391ÐQUALIFICATIONS OF § 391.41; comments received in response to this DRIVERS [REVISED] (ii) Free of insulin reactions (one is notice. 1. The authority citation for part 391 free of insulin reactions if that Executive Order 12612 (Federalism continues to read as follows: individual has experienced less than one documented, symptomatic Assessment) Authority: 49 U.S.C. 504, 31133, 31136, and 31502; and 49 CFR 1.48. hypoglycemic reaction per month); This proposed rulemaking, if (iii) Able to and has demonstrated promulgated, would amend Part 391 of § 391.2 [Redesignated] willingness to properly monitor and the FMCSRs pertaining to the 2. Part 391 is amended by manage his/her diabetes; and qualification of drivers. This action redesignating § 391.2, as § 391.62, and (iv) Not likely to suffer any would allow drivers who currently hold revising the section to read as follows: diminution in driving ability due to his/ waivers from the Federal vision and her diabetic condition. diabetes requirements to continue § 391.62 Limited exemptions for intra-city (2) The driver agrees to and complies operating in interstate commerce after zone drivers. with the following conditions: March 31, 1996. This proposal has been The provisions of §§ 391.11 (b)(1) and (i) A source of rapidly absorbable analyzed in accordance with the 391.41 (b)(1) through (b)(11) do not glucose will be carried at all times while principles and criteria contained in apply to a person who: driving; Executive Order 12612. Nothing in this (a) Was otherwise qualified to operate (ii) Blood glucose levels are to be self- proposal would directly preempt any and operated a commercial motor monitored one hour prior to driving and Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Proposed Rules 611 at least once every four hours while (1) The driver is physically examined (e) Any driver operating under a driving or on duty prior to driving using every year, including an examination by limited exemption authorized by a portable glucose monitoring device an ophthalmologist or optometrist § 391.64 of this part shall furnish the equipped with a computerized memory; attesting to the fact the driver medical examiner with a copy of the (iii) Blood glucose logs will be (i) Is otherwise qualified under annual medical findings of the submitted to the endocrinologist or § 391.41; and endocrinologist, ophthalmologist or medical examiner at the annual (ii) Continues to measure at least 20/ optometrist, as required under that examination or when otherwise directed 40 (Snellen) in the better eye. section. If the medical examiner finds the driver qualified under the limited by an authorized agent of the FHWA; (2) The driver provides a copy of the exemption in § 391.64, such fact shall be and ophthalmologist or optometrist report to noted on the Medical Examiner’s (iv) A copy of the endocrinologist’s the medical examiner at the time of the Certificate. report will be provided to the medical annual medical examination. examiner at the time of the annual (3) The driver provides a copy of the * * * * * medical examination; and annual medical certification to the 4. Section 391.43 is further amended (v) A copy of the annual medical employer for retention in the driver’s by inserting in the form following newly certification will be provided to the designated paragraph (h), a new entry qualification file and retains a copy of ll employer for retention in the driver’s the certification on his/her person while reading ‘‘ Qualified by operation of qualification file and a copy of the 49 CFR 391.64’’ immediately following driving for presentation to a duly ll certification will be retained on his/her authorized Federal, State or local the entry ‘‘ Medically unqualified person while driving for presentation to enforcement official. unless driving within an exempt intracity zone’’. a duly authorized federal, state or local 3. Section 391.43 is amended by enforcement official. redesignating paragraphs (e), (f) and (g) § 319.45 [Amended] (b) The provisions of § 391.41(b)(10) as paragraphs (f), (g) and (h), 5. Section 391.45 is amended by do not apply to a driver who was a respectively and by adding a new revising ‘‘§ 391.2(d)’’ in paragraph (b)(2) participant in good standing on March paragraph (e) to read as follows: to read ‘‘391.62, or only by operation of 31, 1996, in a study concerning the the exemption in § 391.64,’’. operation of commercial motor vehicles § 391.43 Medical examination; certificate by drivers with visual impairment in of physical examination. [FR Doc. 96–218 Filed 1–5–96; 8:45 am] one eye, provided: * * * * * BILLING CODE 4910±22±P i

Reader Aids Federal Register Vol. 61, No. 5 Mondy, January 8, 1996

CUSTOMER SERVICE AND INFORMATION CFR PARTS AFFECTED DURING JANUARY

Federal Register/Code of Federal Regulations At the end of each month, the Office of the Federal Register General Information, indexes and other finding 202±523±5227 publishes separately a List of CFR Sections Affected (LSA), which aids lists parts and sections affected by documents published since Public inspection announcement line 523±5215 the revision date of each title. 563b...... 575 Laws 3 CFR 563c ...... 575 Public Laws Update Services (numbers, dates, etc.) 523±6641 Proclamations 563d...... 575 For additional information 523±5227 6860...... 381 565...... 575 Executive Orders: Presidential Documents 566...... 575 12543 (Continued by 567...... 575 523±5227 Executive orders and proclamations Notice of January 3, 571...... 575 The United States Government Manual 523±5227 1996) ...... 383 574...... 575 Other Services 12544 (Continued by 575...... 575 Notice of January 3, Electronic and on-line services (voice) 523±4534 583...... 575 1996) ...... 383 584...... 575 Privacy Act Compilation 523±3187 Administrative Orders: 707...... 114 TDD for the hearing impaired 523±5229 Notice of January 3, 1996 ...... 383 14 CFR ELECTRONIC BULLETIN BOARD 12944 (Superseded by 23...... 1, 252 EO 12984)...... 235 35...... 114, 254 Free Electronic Bulletin Board service for Public Law numbers, 12984...... 235 39...... 116, 511 Federal Register finding aids, and list of documents on public 71...3, 120, 121, 232, 255, 513, inspection. 202±275±0920 5 CFR 514 FAX-ON-DEMAND 1201...... 1 73...... 4 Proposed Rules: Proposed Rules: You may access our Fax-On-Demand service. You only need a fax 330...... 546 machine and there is no charge for the service except for long 39 ...... 131, 133, 134 333...... 546 71 ...... 513, 548, 549, 550, 551 distance telephone charges the user may incur. The list of 335...... 546 documents on public inspection and the daily Federal Register’s 731...... 394 15 CFR table of contents are available using this service. The document 732...... 394 990...... 440 numbers are 7050-Public Inspection list and 7051-Table of 736...... 394 Contents list. The public inspection list will be updated 17 CFR immediately for documents filed on an emergency basis. 7 CFR Proposed Rules: NOTE: YOU WILL ONLY GET A LISTING OF DOCUMENTS ON 97...... 247 928...... 99 210...... 578 FILE AND NOT THE ACTUAL DOCUMENT. Documents on 228...... 578 public inspection may be viewed and copied in our office located 979...... 248 989...... 100 229...... 578 at 800 North Capitol Street, N.W., Suite 700. The Fax-On-Demand 239...... 578 telephone number is: 301±713±6905 997...... 102 1773...... 104 240...... 578 3017...... 250 249...... 578 FEDERAL REGISTER PAGES AND DATES, JANUARY Proposed Rules: 19 CFR 930...... 21 1±98...... 2 162...... 258 99±246...... 3 1789...... 21 247±380...... 4 10 CFR 21 CFR 381±510...... 5 50...... 232 173...... 385 511±612...... 8 Proposed Rules: 510 ...... 258, 259, 514 26...... 27 522...... 260 30...... 295 558...... 514 31...... 295 573...... 5 32...... 295 Proposed Rules: 40...... 295 101...... 296 70...... 295 26 CFR 12 CFR 1...... 6, 260, 262, 515, 517, 552 268...... 251 20...... 515 506...... 575 23...... 515 510...... 575 24...... 515 512...... 575 25...... 515 516...... 575 27...... 515 543...... 575 33...... 515 544...... 575 38...... 515 545...... 575 301...... 260, 515 550...... 575 602 ...... 6, 260, 262, 515, 517 552...... 575 Proposed Rules: 556...... 575 1 ...... 28, 338, 552 563...... 575 301...... 338 ii Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Reader Aids

27 CFR 576...... 274 TREASURY DEPARTMENT due by 1-12-96; published 4...... 522 577...... 274 Internal Revenue Service 12-13-95 Proposed Rules: Federal regulatory review; ENERGY DEPARTMENT 28 CFR 195...... 342 CFR parts removed; Federal Energy Regulatory 391...... 606 540...... 90 published 1-8-96¶ Commission 553...... 145 542...... 86 Natural gas companies 545...... 90, 378 50 CFR Comments Due Next (Natural Gas Act): Proposed Rules: Week Outer Continental Shelf; gas 540...... 92 222...... 17 pipeline facilities and 545...... 92 227...... 17 AGRICULTURE services; agency's 611...... 279 DEPARTMENT 29 CFR 625...... 291, 292 jurisdiction; comments due Agricultural Marketing by 1-12-96; published 12- 215...... 386 641...... 17 652...... 293 Service 11-95 31 CFR 663...... 279 Okra (frozen); grade ENVIRONMENTAL 675...... 20 standards; comments due PROTECTION AGENCY 1...... 386 by 1-8-96; published 12-7- Proposed Rules: Air pollutants, hazardous; Proposed Rules: 95 17...... 35 national emission standards: 256...... 552 Onions grown in-- 356...... 402 Chromium emissions from REMINDERS Texas; comments due by 1- hard and decorative 32 CFR 11-96; published 12-12-95 chromium electroplating 40b...... 541 The rules and proposed rules Peas, field and black-eye and anodizing tanks, etc.; 69...... 271 in this list were editorially (frozen); grade standards; comments due by 1-12- 234...... 541 compiled as an aid to Federal comments due by 1-8-96; 96; published 12-13-95 Proposed Rules: Register users. Inclusion or published 12-7-95 Air quality implementation 199...... 339 exclusion from this list has no COMMERCE DEPARTMENT plans; approval and legal significance. National Oceanic and promulgation; various 33 CFR Atmospheric Administration States: Ch. 1 ...... 8 Rules Going Into Effect Fishery conservation and Pennsylvania; comments 81...... 8 Today management: due by 1-12-96; published 165...... 544 12-13-95 Bering Sea and Aleutian Proposed Rules: DEFENSE DEPARTMENT Islands groundfish; South Carolina; comments 165...... 136 Personnel: comments due by 1-10- due by 1-10-96; published 207...... 33 Conduct on Pentagon 96; published 12-11-95 12-11-95 Washington; comments due 36 CFR Reservation; published 1- COMMODITY FUTURES by 1-8-96; published 12-8- 8-96 TRADING COMMISSION 1253...... 390 95 ENVIRONMENTAL Commodity Exchange Act: 40 CFR PROTECTION AGENCY Air quality implementation Futures commission plans; √A√approval and Air quality implementation 86...... 122 merchants; minimum promulgation; various plans; approval and 88...... 122, 129 financial requirements, States; air quality planning promulgation; various Proposed Rules: subordinated debt purposes; designation of States: 85...... 140 prepayment, and gross areas: Illinois; published 11-8-95 collection of exchange-set 86...... 140 Florida; comments due by margin for omnibus 88...... 140 New Mexico; published 11- 1-8-96; published 12-7-95 8-95 accounts; comments due 41 CFR by 1-12-96; published 12- New Jersey; comments due Ohio; published 12-7-95 by 1-8-96; published 12-7- 201±1...... 10 13-95 Texas; published 11-8-95 95 201±2...... 10 DEFENSE DEPARTMENT HEALTH AND HUMAN Clean Air Act: 201±3...... 10 Acquisition regulations: 201±4...... 10 SERVICES DEPARTMENT State operating permits 201±6...... 10 Food and Drug Ground and aircraft flight programs-- risk; comments due by 1- 201±7...... 10 Administration California; comments due 12-96; published 11-13-95 201±17...... 10 Animal drugs, feeds, and by 1-8-96; published 201±18...... 10 related products: Multiyear contracting and 12-7-95 other miscellaneous 201±20...... 10 Sponsor name and address California; comments due provisions; comments due 201±21...... 10 changes-- by 1-8-96; published by 1-12-96; published 11- 201±22...... 10 12-7-95 201±24...... 10 A.L. Pharma, Inc.; 13-95 published 1-8-96 California; comments due 201±39...... 10 Federal Acquisition Regulation Public information: by 1-8-96; published (FAR): 12-7-95 48 CFR Communications with State Contingent fee California; comments due 225...... 130 and foreign government representation; comments 252...... 130 officials; published 12-8-95 by 1-8-96; published due by 1-12-96; published 12-7-95 1213...... 391 LABOR DEPARTMENT 11-13-95 1215...... 273 Hazardous waste: Federal transit law guidelines; Employee stock ownership 1237...... 391 Military munitions rule; published 12-7-95 plans; comments due by 1252...... 273, 391 1-8-96; published 11-7-95 explosives emergencies; 1253...... 273 PERSONNEL MANAGEMENT redefinition of on-site; Proposed Rules: OFFICE EDUCATION DEPARTMENT comments due by 1-8-96; 31...... 234 Prevailing rate systems Postsecondary education: published 11-8-95 Technical corrections and Student support services Pesticides; tolerances in food, 49 CFR clarifications; published program; clarification and animal feeds, and raw 573...... 274 12-7-95 simplification; comments agricultural commodities: Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Reader Aids iii

Imidacloprid; comments due and surplus definition to authority; comments due Hamilton; comments due by by 1-12-96; published 12- unimpaired capital stock and by 1-8-96; published 11-9- 1-8-96; published 11-8-95 13-95 surplus definition, etc.; 95 Teledyne Continental Superfund program: comments due by 1-8-96; POSTAL RATE COMMISSION Motors; comments due by National oil and hazardous published 12-4-95 Practice and procedure rules: substances contingency 1-12-96; published 11-13- HEALTH AND HUMAN Rate and classification 95 plan-- SERVICES DEPARTMENT changes; expedition, National priorities list Food and Drug flexibility, and innovation; Airworthiness standards: update; comments due Administration comments due by 1-8-96; by 1-11-96; published published 12-18-95 Special conditions-- 12-20-95 Medical devices: TRANSPORTATION Toxic substances: Medical device user facilities Beech model 200 DEPARTMENT Significant new uses-- and manufacturers; airplane, etc.; comments Coast Guard Ethane, 1,1,1,2,2- adverse events reporting; due by 1-8-96; Anchorage regulations: pentafluoro-; comments certification and published 12-7-95 registration; comments Louisiana; comments due by due by 1-12-96; Class E airspace; comments published 12-13-95 due by 1-10-96; published 1-12-96; published 11-13- 12-11-95 95 due by 1-8-96; published FEDERAL 12-1-95 COMMUNICATIONS INTERIOR DEPARTMENT International Convention on Standards of Training, COMMISSION Surface Mining Reclamation Rulemaking petitions; Certification and Common carrier services: and Enforcement Office summary and disposition; Watchkeeping for Seafarers Hearing aid compatible comments due by 1-8-96; Indian lands program: (STCW 78) wireline telephones in Abandoned mine land published 11-8-95 workplaces, confined Comment request; reclamation plan-- settings, etc.; comments comments due by 1-12- TRANSPORTATION due by 1-12-96; published Hopi Tribe; comments due 96; published 11-13-95 DEPARTMENT 12-12-95 by 1-8-96; published Ports and waterways safety: Federal Highway Radio stations; table of 12-7-95 Boon Island, ME; sunken assignments: Permanent program and vessel M/V EMPIRE Administration Maine; comments due by 1- abandoned mine land KNIGHT; safety zone; Engineering and traffic 8-96; published 12-4-95 reclamation plan comments due by 1-12- operations: Television broadcasting: submissions: 96; published 11-13-95 Cable Television Consumer Colorado; comments due by TRANSPORTATION Emergency relief program; Protection and 1-8-96; published 12-7-95 DEPARTMENT comments due by 1-12- Competition Act of 1992-- LABOR DEPARTMENT Federal Aviation 96; published 11-13-95 Rate regulation; Administration Occupational Safety and TRANSPORTATION comments due by 1-12- Health Administration Airworthiness directives: 96; published 12-11-95 DEPARTMENT Safety and health standards, de Havilland; comments due FEDERAL EMERGENCY etc.: by 1-12-96; published 11- National Highway Traffic MANAGEMENT AGENCY 14-95 Respiratory protection; Safety Administration Flood insurance programs: Airbus; comments due by 1- comments due by 1-8-96; Insurance coverage and 8-96; published 11-9-95 Motor vehicle safety published 11-7-95 rates; comments due by British Aerospace; standards: 1-8-96; published 11-9-95 PERSONNEL MANAGEMENT comments due by 1-12- Child restraint systems-- FEDERAL RESERVE OFFICE 96; published 11-13-95 SYSTEM Federal claims collection: Fokker; comments due by Booster seat safety; Transactions with affiliates; Claims collections 1-8-96; published 11-28- comments due by 1-11- conformity of capital stock standards; delegation of 95 96; published 12-12-95 iv Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Reader Aids

CFR CHECKLIST Title Stock Number Price Revision Date 14 Parts: 1–59 ...... (869–026–00042–5) ...... 33.00 Jan. 1, 1995 This checklist, prepared by the Office of the Federal Register, is 60–139 ...... (869–026–00043–3) ...... 27.00 Jan. 1, 1995 published weekly. It is arranged in the order of CFR titles, stock 140–199 ...... (869–026–00044–1) ...... 13.00 Jan. 1, 1995 numbers, prices, and revision dates. 200–1199 ...... (869–026–00045–0) ...... 23.00 Jan. 1, 1995 An asterisk (*) precedes each entry that has been issued since last 1200–End ...... (869–026–00046–8) ...... 16.00 Jan. 1, 1995 week and which is now available for sale at the Government Printing 15 Parts: Office. 0–299 ...... (869–026–00047–6) ...... 15.00 Jan. 1, 1995 A checklist of current CFR volumes comprising a complete CFR set, 300–799 ...... (869–026–00048–4) ...... 26.00 Jan. 1, 1995 also appears in the latest issue of the LSA (List of CFR Sections 800–End ...... (869–026–00049–2) ...... 21.00 Jan. 1, 1995 Affected), which is revised monthly. 16 Parts: The annual rate for subscription to all revised volumes is $883.00 0–149 ...... (869–026–00050–6) ...... 7.00 Jan. 1, 1995 domestic, $220.75 additional for foreign mailing. 150–999 ...... (869–026–00051–4) ...... 19.00 Jan. 1, 1995 Mail orders to the Superintendent of Documents, Attn: New Orders, 1000–End ...... (869–026–00052–2) ...... 25.00 Jan. 1, 1995 P.O. Box 371954, Pittsburgh, PA 15250±7954. All orders must be accompanied by remittance (check, money order, GPO Deposit 17 Parts: Account, VISA, or Master Card). Charge orders may be telephoned 1–199 ...... (869–026–00054–9) ...... 20.00 Apr. 1, 1995 ...... to the GPO Order Desk, Monday through Friday, at (202) 512±1800 200–239 (869–026–00055–7) 24.00 Apr. 1, 1995 ...... from 8:00 a.m. to 4:00 p.m. eastern time, or FAX your charge orders 240–End (869–026–00056–5) 30.00 Apr. 1, 1995 to (202) 512-2233. 18 Parts: Title Stock Number Price Revision Date 1–149 ...... (869–026–00057–3) ...... 16.00 Apr. 1, 1995 150–279 ...... (869–026–00058–1) ...... 13.00 Apr. 1, 1995 1, 2 (2 Reserved) ...... (869–026–00001–8) ...... $5.00 Jan. 1, 1995 280–399 ...... (869–026–00059–0) ...... 13.00 Apr. 1, 1995 3 (1994 Compilation 400–End ...... (869–026–00060–3) ...... 11.00 Apr. 1, 1995 and Parts 100 and 19 Parts: 1 101) ...... (869–026–00002–6) ...... 40.00 Jan. 1, 1995 1–140 ...... (869–026–00061–1) ...... 25.00 Apr. 1, 1995 4 ...... (869–026–00003–4) ...... 5.50 Jan. 1, 1995 141–199 ...... (869–026–00062–0) ...... 21.00 Apr. 1, 1995 200–End ...... (869–026–00063–8) ...... 12.00 Apr. 1, 1995 5 Parts: 1–699 ...... (869–026–00004–2) ...... 23.00 Jan. 1, 1995 20 Parts: 700–1199 ...... (869–026–00005–1) ...... 20.00 Jan. 1, 1995 1–399 ...... (869–026–00064–6) ...... 20.00 Apr. 1, 1995 1200–End, 6 (6 400–499 ...... (869–026–00065–4) ...... 34.00 Apr. 1, 1995 Reserved) ...... (869–026–00006–9) ...... 23.00 Jan. 1, 1995 500–End ...... (869–026–00066–2) ...... 34.00 Apr. 1, 1995 7 Parts: 21 Parts: 0–26 ...... (869–026–00007–7) ...... 21.00 Jan. 1, 1995 1–99 ...... (869–026–00067–1) ...... 16.00 Apr. 1, 1995 27–45 ...... (869–026–00008–5) ...... 14.00 Jan. 1, 1995 100–169 ...... (869–026–00068–9) ...... 21.00 Apr. 1, 1995 46–51 ...... (869–026–00009–3) ...... 21.00 Jan. 1, 1995 170–199 ...... (869–026–00069–7) ...... 22.00 Apr. 1, 1995 52 ...... (869–026–00010–7) ...... 30.00 Jan. 1, 1995 200–299 ...... (869–026–00070–1) ...... 7.00 Apr. 1, 1995 53–209 ...... (869–026–00011–5) ...... 25.00 Jan. 1, 1995 300–499 ...... (869–026–00071–9) ...... 39.00 Apr. 1, 1995 210–299 ...... (869–026–00012–3) ...... 34.00 Jan. 1, 1995 500–599 ...... (869–026–00072–7) ...... 22.00 Apr. 1, 1995 300–399 ...... (869–026–00013–1) ...... 16.00 Jan. 1, 1995 600–799 ...... (869–026–00073–5) ...... 9.50 Apr. 1, 1995 400–699 ...... (869–026–00014–0) ...... 21.00 Jan. 1, 1995 800–1299 ...... (869–026–00074–3) ...... 23.00 Apr. 1, 1995 700–899 ...... (869–026–00015–8) ...... 23.00 Jan. 1, 1995 1300–End ...... (869–026–00075–1) ...... 13.00 Apr. 1, 1995 900–999 ...... (869–026–00016–6) ...... 32.00 Jan. 1, 1995 1000–1059 ...... (869–026–00017–4) ...... 23.00 Jan. 1, 1995 22 Parts: 1060–1119 ...... (869–026–00018–2) ...... 15.00 Jan. 1, 1995 1–299 ...... (869–026–00076–0) ...... 33.00 Apr. 1, 1995 1120–1199 ...... (869–026–00019–1) ...... 12.00 Jan. 1, 1995 300–End ...... (869–026–00077–8) ...... 24.00 Apr. 1, 1995 1200–1499 ...... (869–026–00020–4) ...... 32.00 Jan. 1, 1995 23 ...... (869–026–00078–6) ...... 22.00 Apr. 1, 1995 1500–1899 ...... (869–026–00021–2) ...... 35.00 Jan. 1, 1995 24 Parts: 1900–1939 ...... (869–026–00022–1) ...... 16.00 Jan. 1, 1995 ...... 1940–1949 ...... (869–026–00023–9) ...... 30.00 Jan. 1, 1995 0–199 (869–026–00079–4) 40.00 Apr. 1, 1995 1950–1999 ...... (869–026–00024–7) ...... 40.00 Jan. 1, 1995 200–219 ...... (869–026–00080–8) ...... 19.00 Apr. 1, 1995 2000–End ...... (869–026–00025–5) ...... 14.00 Jan. 1, 1995 220–499 ...... (869–026–00081–6) ...... 23.00 Apr. 1, 1995 500–699 ...... (869–026–00082–4) ...... 20.00 Apr. 1, 1995 8 ...... (869–026–00026–3) ...... 23.00 Jan. 1, 1995 700–899 ...... (869–026–00083–2) ...... 24.00 Apr. 1, 1995 9 Parts: 900–1699 ...... (869–026–00084–1) ...... 24.00 Apr. 1, 1995 1–199 ...... (869–026–00027–1) ...... 30.00 Jan. 1, 1995 1700–End ...... (869–026–00085–9) ...... 17.00 Apr. 1, 1995 200–End ...... (869–026–00028–0) ...... 23.00 Jan. 1, 1995 25 ...... (869–026–00086–7) ...... 32.00 Apr. 1, 1995 10 Parts: 26 Parts: 0–50 ...... (869–026–00029–8) ...... 30.00 Jan. 1, 1995 §§ 1.0-1–1.60 ...... (869–026–00087–5) ...... 21.00 Apr. 1, 1995 51–199 ...... (869–026–00030–1) ...... 23.00 Jan. 1, 1995 §§ 1.61–1.169 ...... (869–026–00088–3) ...... 34.00 Apr. 1, 1995 200–399 ...... (869–026–00031–0) ...... 15.00 6Jan. 1, 1993 §§ 1.170–1.300 ...... (869–026–00089–1) ...... 24.00 Apr. 1, 1995 400–499 ...... (869–026–00032–8) ...... 21.00 Jan. 1, 1995 §§ 1.301–1.400 ...... (869–026–00090–5) ...... 17.00 Apr. 1, 1995 500–End ...... (869–026–00033–6) ...... 39.00 Jan. 1, 1995 §§ 1.401–1.440 ...... (869–026–00091–3) ...... 30.00 Apr. 1, 1995 11 ...... (869–026–00034–4) ...... 14.00 Jan. 1, 1995 §§ 1.441-1.500 ...... (869-026-00092-1) ...... 22.00 Apr. 1, 1995 §§ 1.501–1.640 ...... (869–026–00093–0) ...... 21.00 Apr. 1, 1995 12 Parts: §§ 1.641–1.850 ...... (869–026–00094–8) ...... 25.00 Apr. 1, 1995 1–199 ...... (869–026–00035–2) ...... 12.00 Jan. 1, 1995 §§ 1.851–1.907 ...... (869–026–00095–6) ...... 26.00 Apr. 1, 1995 200–219 ...... (869–026–00036–1) ...... 16.00 Jan. 1, 1995 §§ 1.908–1.1000 ...... (869–026–00096–4) ...... 27.00 Apr. 1, 1995 220–299 ...... (869–026–00037–9) ...... 28.00 Jan. 1, 1995 §§ 1.1001–1.1400 ...... (869–026–00097–2) ...... 25.00 Apr. 1, 1995 300–499 ...... (869–026–00038–7) ...... 23.00 Jan. 1, 1995 §§ 1.1401–End ...... (869–026–00098–1) ...... 33.00 Apr. 1, 1995 500–599 ...... (869–026–00039–5) ...... 19.00 Jan. 1, 1995 2–29 ...... (869–026–00099–9) ...... 25.00 Apr. 1, 1995 ...... 600–End (869–026–00040–9) 35.00 Jan. 1, 1995 30–39 ...... (869–026–00100–6) ...... 18.00 Apr. 1, 1995 13 ...... (869–026–00041–7) ...... 32.00 Jan. 1, 1995 40–49 ...... (869–026–00101–4) ...... 14.00 Apr. 1, 1995 Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Reader Aids v

Title Stock Number Price Revision Date Title Stock Number Price Revision Date 50–299 ...... (869–026–00102–2) ...... 14.00 Apr. 1, 1995 400–424 ...... (869–026–00155–3) ...... 26.00 July 1, 1995 300–499 ...... (869–026–00103–1) ...... 24.00 Apr. 1, 1995 425–699 ...... (869–026–00156–1) ...... 30.00 July 1, 1995 500–599 ...... (869–026–00104–9) ...... 6.00 4 Apr. 1, 1990 700–789 ...... (869–026–00157–0) ...... 25.00 July 1, 1995 600–End ...... (869–026–00105–7) ...... 8.00 Apr. 1, 1995 790–End ...... (869–026–00158–8) ...... 15.00 July 1, 1995 27 Parts: 41 Chapters: 1–199 ...... (869–026–00106–5) ...... 37.00 Apr. 1, 1995 1, 1–1 to 1–10 ...... 13.00 3 July 1, 1984 200–End ...... (869–026–00107–3) ...... 13.00 8Apr. 1, 1994 1, 1–11 to Appendix, 2 (2 Reserved) ...... 13.00 3 July 1, 1984 3–6 ...... 14.00 3 July 1, 1984 28 Parts: ...... 7 ...... 6.00 3 July 1, 1984 1-42 ...... (869–026–00108–1) ...... 27.00 July 1, 1995 8 ...... 4.50 3 July 1, 1984 43-end ...... (869-026-00109-0) ...... 22.00 July 1, 1995 9 ...... 13.00 3 July 1, 1984 29 Parts: 10–17 ...... 9.50 3 July 1, 1984 0–99 ...... (869–026–00110–3) ...... 21.00 July 1, 1995 18, Vol. I, Parts 1–5 ...... 13.00 3 July 1, 1984 100–499 ...... (869–026–00111–1) ...... 9.50 July 1, 1995 18, Vol. II, Parts 6–19 ...... 13.00 3 July 1, 1984 500–899 ...... (869–026–00112–0) ...... 36.00 July 1, 1995 18, Vol. III, Parts 20–52 ...... 13.00 3 July 1, 1984 900–1899 ...... (869–026–00113–8) ...... 17.00 July 1, 1995 19–100 ...... 13.00 3 July 1, 1984 1900–1910 (§§ 1901.1 to 1–100 ...... (869–026–00159–6) ...... 9.50 July 1, 1995 1910.999) ...... (869–026–00114–6) ...... 33.00 July 1, 1995 101 ...... (869–026–00160–0) ...... 29.00 July 1, 1995 1910 (§§ 1910.1000 to 102–200 ...... (869–026–00161–8) ...... 15.00 July 1, 1995 end) ...... (869–026–00115–4) ...... 22.00 July 1, 1995 201–End ...... (869–026–00162–6) ...... 13.00 July 1, 1995 1911–1925 ...... (869–026–00116–2) ...... 27.00 July 1, 1995 42 Parts: 1926 ...... (869–026–00117–1) ...... 35.00 July 1, 1995 1–399 ...... (869–022–00160–4) ...... 24.00 Oct. 1, 1994 1927–End ...... (869–026–00118–9) ...... 36.00 July 1, 1995 400–429 ...... (869–022–00161–2) ...... 26.00 Oct. 1, 1994 30 Parts: 430–End ...... (869–022–00162–1) ...... 36.00 Oct. 1, 1994 1–199 ...... (869–026–00119–7) ...... 25.00 July 1, 1995 43 Parts: 200–699 ...... (869–026–00120–1) ...... 20.00 July 1, 1995 1–999 ...... (869–022–00163–9) ...... 23.00 Oct. 1, 1994 700–End ...... (869–026–00121–9) ...... 30.00 July 1, 1995 1000–3999 ...... (869–022–00164–7) ...... 31.00 Oct. 1, 1994 31 Parts: 4000–End ...... (869–026–00168–5) ...... 15.00 Oct. 1, 1995 0–199 ...... (869–026–00122–7) ...... 15.00 July 1, 1995 44 ...... (869–022–00166–3) ...... 27.00 Oct. 1, 1994 200–End ...... (869–026–00123–5) ...... 25.00 July 1, 1995 45 Parts: 32 Parts: 2 1–199 ...... (869–022–00167–1) ...... 22.00 Oct. 1, 1994 1–39, Vol. I ...... 15.00 July 1, 1984 200–499 ...... (869–026–00171–5) ...... 14.00 Oct. 1, 1995 1–39, Vol. II ...... 19.00 2 July 1, 1984 2 500–1199 ...... (869–026–00172–3) ...... 23.00 Oct. 1, 1995 1–39, Vol. III ...... 18.00 July 1, 1984 1200–End ...... (869–022–00170–1) ...... 26.00 Oct. 1, 1994 1–190 ...... (869–026–00124–3) ...... 32.00 July 1, 1995 191–399 ...... (869–026–00125–1) ...... 38.00 July 1, 1995 46 Parts: 400–629 ...... (869–026–00126–0) ...... 26.00 July 1, 1995 1–40 ...... (869–022–00171–0) ...... 20.00 Oct. 1, 1994 630–699 ...... (869–026–00127–8) ...... 14.00 5 July 1, 1991 41–69 ...... (869–022–00172–8) ...... 16.00 Oct. 1, 1994 700–799 ...... (869–026–00128–6) ...... 21.00 July 1, 1995 70–89 ...... (869–022–00173–6) ...... 8.50 Oct. 1, 1994 800–End ...... (869–026–00129–4) ...... 22.00 July 1, 1995 90–139 ...... (869–022–00174–4) ...... 15.00 Oct. 1, 1994 140–155 ...... (869–022–00175–2) ...... 12.00 Oct. 1, 1994 33 Parts: 156–165 ...... (869–022–00176–1) ...... 17.00 7Oct. 1, 1993 1–124 ...... (869–026–00130–8) ...... 20.00 July 1, 1995 166–199 ...... (869–022–00177–9) ...... 17.00 Oct. 1, 1994 125–199 ...... (869–026–00131–6) ...... 27.00 July 1, 1995 200–499 ...... (869–022–00178–7) ...... 21.00 Oct. 1, 1994 200–End ...... (869–026–00132–4) ...... 24.00 July 1, 1995 500–End ...... (869–022–00179–5) ...... 15.00 Oct. 1, 1994 34 Parts: 47 Parts: 1–299 ...... (869–026–00133–2) ...... 25.00 July 1, 1995 0–19 ...... (869–022–00180–9) ...... 25.00 Oct. 1, 1994 300–399 ...... (869–026–00134–1) ...... 21.00 July 1, 1995 *20–39 ...... (869–026–00184–7) ...... 21.00 Oct. 1, 1995 400–End ...... (869–026–00135–9) ...... 37.00 July 5, 1995 40–69 ...... (869–022–00182–5) ...... 14.00 Oct. 1, 1994 35 ...... (869–026–00136–7) ...... 12.00 July 1, 1995 70–79 ...... (869–022–00183–3) ...... 24.00 Oct. 1, 1994 80–End ...... (869–022–00184–1) ...... 26.00 Oct. 1, 1994 36 Parts 1–199 ...... (869–026–00137–5) ...... 15.00 July 1, 1995 48 Chapters: 200–End ...... (869–026–00138–3) ...... 37.00 July 1, 1995 1 (Parts 1–51) ...... (869–022–00185–0) ...... 36.00 Oct. 1, 1994 1 (Parts 52–99) ...... (869–022–00186–8) ...... 23.00 Oct. 1, 1994 37 ...... (869–026–00139–1) ...... 20.00 July 1, 1995 2 (Parts 201–251) ...... (869–022–00187–6) ...... 16.00 Oct. 1, 1994 38 Parts: 2 (Parts 252–299) ...... (869–022–00188–4) ...... 13.00 Oct. 1, 1994 0–17 ...... (869–026–00140–5) ...... 30.00 July 1, 1995 3–6 ...... (869–022–00189–2) ...... 23.00 Oct. 1, 1994 18–End ...... (869–026–00141–3) ...... 30.00 July 1, 1995 7–14 ...... (869–022–00190–6) ...... 30.00 Oct. 1, 1994 39 ...... (869–026–00142–1) ...... 17.00 July 1, 1995 15–28 ...... (869–022–00191–4) ...... 32.00 Oct. 1, 1994 29–End ...... (869–022–00192–2) ...... 17.00 Oct. 1, 1994 40 Parts: 1–51 ...... (869–026–00143–0) ...... 40.00 July 1, 1995 49 Parts: 52 ...... (869–026–00144–8) ...... 39.00 July 1, 1995 1–99 ...... (869–026–00196–1) ...... 25.00 Oct. 1, 1995 53–59 ...... (869–026–00145–6) ...... 11.00 July 1, 1995 100–177 ...... (869–022–00194–9) ...... 30.00 Oct. 1, 1994 60 ...... (869-026-00146-4) ...... 36.00 July 1, 1995 178–199 ...... (869–022–00195–7) ...... 21.00 Oct. 1, 1994 61–71 ...... (869–026–00147–2) ...... 36.00 July 1, 1995 200–399 ...... (869–022–00196–5) ...... 30.00 Oct. 1, 1994 *72–85 ...... (869–026–00148–1) ...... 41.00 July 1, 1995 400–999 ...... (869–022–00197–3) ...... 35.00 Oct. 1, 1994 86 ...... (869–026–00149–9) ...... 40.00 July 1, 1995 1000–1199 ...... (869–026–00201–1) ...... 18.00 Oct. 1, 1995 87–149 ...... (869–026–00150–2) ...... 41.00 July 1, 1995 1200–End ...... (869–026–00202–9) ...... 15.00 Oct. 1, 1995 150–189 ...... (869–026–00151–1) ...... 25.00 July 1, 1995 50 Parts: 190–259 ...... (869–026–00152–9) ...... 17.00 July 1, 1995 1–199 ...... (869–022–00200–7) ...... 25.00 Oct. 1, 1994 260–299 ...... (869–026–00153–7) ...... 40.00 July 1, 1995 200–599 ...... (869–022–00201–5) ...... 22.00 Oct. 1, 1994 300–399 ...... (869–026–00154–5) ...... 21.00 July 1, 1995 600–End ...... (869–022–00202–3) ...... 27.00 Oct. 1, 1994 vi Federal Register / Vol. 61, No. 5 / Monday, January 8, 1996 / Reader Aids

Title Stock Number Price Revision Date CFR Index and Findings Aids ...... (869–026–00053–1) ...... 36.00 Jan. 1, 1995 Complete 1996 CFR set ...... 883.00 1996 Microfiche CFR Edition: Subscription (mailed as issued) ...... 264.00 1996 Individual copies ...... 1.00 1996 Complete set (one-time mailing) ...... 264.00 1995 Complete set (one-time mailing) ...... 244.00 1994 Complete set (one-time mailing) ...... 223.00 1993 1 Because Title 3 is an annual compilation, this volume and all previous volumes should be retained as a permanent reference source. 2 The July 1, 1985 edition of 32 CFR Parts 1–189 contains a note only for Parts 1–39 inclusive. For the full text of the Defense Acquisition Regulations in Parts 1–39, consult the three CFR volumes issued as of July 1, 1984, containing those parts. 3 The July 1, 1985 edition of 41 CFR Chapters 1–100 contains a note only for Chapters 1 to 49 inclusive. For the full text of procurement regulations in Chapters 1 to 49, consult the eleven CFR volumes issued as of July 1, 1984 containing those chapters. 4 No amendments to this volume were promulgated during the period Apr. 1, 1990 to Mar. 31, 1995. The CFR volume issued April 1, 1990, should be retained. 5 No amendments to this volume were promulgated during the period July 1, 1991 to June 30, 1995. The CFR volume issued July 1, 1991, should be retained. 6 No amendments to this volume were promulgated during the period January 1, 1993 to December 31, 1994. The CFR volume issued January 1, 1993, should be retained. 7 No amendments to this volume were promulgated during the period October 1, 1993, to September 30, 1994. The CFR volume issued October 1, 1993, should be retained. 8 No amendments to this volume were promulgated during the period April 1, 1994 to March 31, 1995. The CFR volume issued April 1, 1994, should be retained.